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Int. J. Production Economics 90 (2004) 27–45

A fuzzy-logic-based decision-making approach for new


product development
. c-in Buy
Gul . uk .
. ozkan*, Orhan Feyz’ıo*glu
Industrial Engineering Department, Galatasaray University, 80840 Ortakoy, ’
. Istanbul, Turkey

Received 15 April 2002; accepted 16 April 2002

Abstract

The managers spend most of their time to take critical decisions in each level of the organizational hierarchy.
Basically, the decision process is to weight diverse alternatives each having the purpose to attain some of the desired
objectives and to figure out the best solution in the complete challenging goals set. In today’s rapidly changing and
highly uncertain environment, the strategic decisions have an extremely complex and fuzzy nature. In the meantime, the
enterprises have tendency to appreciate the new product development (NPD) activities so as to deal with the innovation
in the new economy and to fulfill the customer demands adequately. The aim of this study is then to improve the
accuracy of decision-making in NPD under uncertainty. We first identify the decision points in the NPD process and
the uncertainty factors affecting those points. Next, we determine the necessary decision models and techniques to help
the decision makers to reduce their risks. Finally, we propose an integrated approach based on fuzzy logic to shape the
decisions and illustrate with an application in software development.
r 2003 Elsevier Science B.V. All rights reserved.

Keywords: New product selection; Uncertainty; Fuzzy logic; Multi-criteria decision making; Software development

1. Introduction cost (Maffin and Braiden, 2001). In order to


obtain best performance from NPD, the efficient
The new product development (NPD) and and effective management of the product develop-
innovation are often recognized as the key ment process is vital. However, new product
processes of competition in a variety of markets failure rates are substantial and the cost of failure
(Brown and Eisenhardt, 1995; Drucker, 1999; is large, and this makes successful NPD rather a
Hamel and Prahalad, 1994; Jones, 1997; McQua- complicating task to be exercised with caution.
ter et al., 1998). Today, markets are generally The NPD process, that its objective is to
perceived to be demanding higher quality and translate an idea into a tangible physical asset, is
higher performing products, in shorter and more structured around well-defined phases; each phase
predictable development cycle-times and at lower encloses many decision points, where management
decides about the future of the project. The
*Corresponding author.
decision maker must take into account the
E-mail addresses: gbuyukozkan@gsu.edu.tr customers’ needs, the company’s strategies as well
. uk
(G. Buy .
. ozkan), ofeyzioglu@gsu.edu.tr (O. Feyz’ıo*glu). as technological opportunities and the company’s

0925-5273/03/$ - see front matter r 2003 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 5 - 5 2 7 3 ( 0 2 ) 0 0 3 3 0 - 4
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O. Feyz’ıoglu

resources, and, deduce the goals based on these section contains some concluding remarks and
factors for a successful NPD. With the support of perspectives.
a successful management system, an enterprise
must be able to determine the right products or
features to be developed, the right time to develop
and launch, the right amount of development 2. New product development process and its
investments, its effective implementation, etc. As it decision points
can be easily understood, no NPD operation can
be accomplished without effective and timely NPD is defined as the transformation of a
decision-making. market opportunity and a set of assumptions
An important cornerstone of the new product about product technology into a product available
management is the idea selection and new product for sale (Krishnan and Ulrich, 2001). NPD is an
project launch decision. Several researchers have interdisciplinary activity (Davila, 2000) including
suggested that it is difficult for managers to end marketing management, organizations, engineer-
NPD projects once they are begun (Cooper, 1994; ing design, operations management and requires
Schmidt and Calantone, 1998). For this reason, contributions from nearly all the functions of an
here we focus especially on increasing the accuracy enterprise, whether it is an upgrade (an improve-
of the necessary decisions before a new product ment of an existing product) or a new concept
project launch. either to the company or to the market (Haque
Similar to all decision problems, NPD decisions et al., 2000). With the NPD activities, it is aimed to
are affected by many uncertainty-causing elements create value for enterprises while renewing and
that confuse the decision maker to reach targeted developing (Matheson and Matheson, 1998).
performance. Uncertainty is an information defect As we have pointed out earlier, NPD has a vast
(Spender, 1993), which may be defined as the working area and it address different strategic,
difference between the amount of information tactic and operational managerial abstraction
required to perform a particular task and the levels in the organization. This is why methodol-
amount of information already possessed (Gal- ogies, assumptions, goals and realization stages
braith, 1973). It arises from a multiplicity of vary among companies. Although different orga-
sources including technical, management and nizations can make different choices and may use
commercial issues, both internal and external to different methods, all of them make decisions
the project. It is also widely recognized and about a collection of issues such as the product
accepted that successful management of uncer- concept, architecture, configuration, procurement
tainty is intimately associated with project success, and distribution arrangements, project schedule,
as the proactive project manager constantly seeks etc. Consequently, NPD can be defined as a
to steer the project towards achievement of desired process including many ‘‘generic decision’’ points,
objectives (Hillson, 2002). Thus, it is critical to use likewise ‘‘decision perspective’’ of Krishnan and
a structured approach that can minimize the Ulrich (2001). In their related work, Urban and
uncertainty at NPD projects. Hauser (1993) recommend a five-step decision
The rest of the paper is organized as follows. In process for NPD: opportunity identification, de-
the next section, we present briefly NPD process sign, testing, introduction and life cycle manage-
and its decision points. In Section 3, we give in a ment. These phases are briefly illustrated in
general setting the uncertainty factors affecting Fig. 1.
those decision points and the available risk- To conclude, NPD process may be accepted as a
reducing techniques for the decision makers. dynamic decision process where each decision
Section 4 describes our proposed decision-making point must be evaluated, selected, and prioritized.
methodology to select and launch NPD projects. All the stages of the process are affected by
The details of the methodology are explained uncertain, changing information and dynamic
through a case study in Section 5. Finally, the last opportunities, which will now be summarized.
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. * / Int. J. Production Economics 90 (2004) 27–45
O. Feyz’ıoglu 29

(Galbraith, 1973). Uncertainty management is an


integral part of NPD projects and so it can be
observed that different approaches exist in the
literature to define and analyze uncertainty in
NPD. Fox et al. (1998) combine three dimensions
of uncertainty as technical, market and process.
They rate and categorize uncertainty along each
dimension as being either low or high. For
technical uncertainty, when uncertainty is low,
the technologies used in the development of the
project are well known to the organization and
relatively stable. When technical uncertainty is
high, technologies used in the development of the
project are neither existent nor proven at the start
of the project, and/or are rapidly changing over
time. For market uncertainty, when uncertainty is
low the organization has good market data on
both customers and competitors, and product is
being sold through familiar channels of distribu-
tion. When market uncertainty is high, the
organization has little information regarding who
the customer is, how the market is segmented and
what are the needed channels of distribution. For
process uncertainty, when uncertainty is low the
engineering, marketing, and communications
(both internal and external) processes used in this
project are well tested, stable, and embedded in the
organization. When process uncertainty is high, a
significant portion of any or all of the engineering,
marketing, and communications processes are
relatively new, unstable, or evolving.
Similarly, Mullins and Sutherland (1998) identify
three levels of uncertainty that confront companies
operating in rapidly changing markets. First,
potential customers cannot easily articulate needs
Fig. 1. NPD process (Matheson and Matheson, 1998). that a new technology may fulfill. Consequently,
NPD managers are uncertain about the market
opportunities that a new technology offers. Sec-
3. Uncertainty in NPD process and decision- ond, NPD managers are uncertain about how to
making methods turn the new technologies into new products that
meet customer needs. This uncertainty arises, not
NPD, by its very nature, is characterized by only from customers’ inability to articulate their
uncertainty (Davila, 2000; Lysonski et al., 1995; needs, but also from managers’ difficulties in
Mullins et al., 1999; Smith, 1999). Uncertainty is translating technological advancements into pro-
an information defect (Spender, 1993), which may duct features and benefits. Finally, senior manage-
be defined as the difference between the amount of ment faces uncertainty about how much capital to
information required to perform a particular task invest in pursuit of rapidly changing markets as
and the amount of information already possessed well as when to invest.
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Miller and Lessard (2001) identify three main making that incorporates uncertainty of outcome
risk categories for engineering projects: ‘‘comple- and expected revenues.
tion risks’’ group formed by technical, construc- Options pricing theory (OPT): It is being
tion and operational risks, ‘‘market related risks’’ proposed as a means of understanding what level
group formed by demand, financial and supply of research investment is justified for a particular
risks and finally, ‘‘institutional risks’’ group project. It treats each stage of the new product
formed by social acceptability and sovereign risks. project much like purchasing an option on a future
We refer also to the recent work of Riek (2001) investment (Faulkner, 1996).
where NPD risks from uncertainty are organized Scoring models and checklists: Here, projects are
into three general categories such as technical rated and scored on a variety of qualitative
risks, commercial risks and NPD personnel. If we questions (in some cases, the project score becomes
analyze NPD from different perspectives, we can the criterion for project prioritization) (Hall and
precise risk structure in a more detailed manner. Naudia, 1990). The questions or items often
As an example, we can allocate product position- capture proven drivers of new product success
ing, pricing and customer uncertainties to market- such as product advantage, market attractiveness,
ing; organizational alignment and team and synergy with the base business (leverages core
characteristics uncertainties to organizations; con- competencies), familiarity, etc. (Montoya-Weiss
cept, configuration and performance uncertainties and Calantone, 1994).
to engineering design; supplier, material, design of Behavioral approaches: These are tools designed
production sequence and project management to bring managers to a consensus in terms of which
uncertainties to operations management. projects to undertake, and include methods such
As it can be observed, uncertainty factors highly as the Delphi method that is a qualitative
depend on the way of how to focus and investigate forecasting method which uses a panel of experts
the theme. However, we can briefly state that, all (Souder and Mandakovic, 1986). They are parti-
kinds of uncertainties for NPD can be classified cularly useful for the early stages, where only
generally in two main categories: uncertainty qualitative information is available.
caused by external factors and uncertainty caused Analytical hierarchy process (AHP): These are
by internal factors. External factors can be further decision tools based on paired comparisons of
subdivided into two groups: market factors both projects and criteria (Saaty, 1980). Software
regarding to competitors, customers and suppliers, tools such as expert choice enable a team of
and technological factors. By the same reasoning, managers to arrive at the preferred set of projects
internal factors can be subdivided into to person- in a portfolio (Zahedi, 1996), with relative ease.
nel and project management factors. Fuzzy logic: It deals with problems in which a
While considering the decision points in whole source of vagueness is involved (Zadeh, 1965). In
NPD process, we require to minimize the side general, the probability concept is related to the
effects of uncertainties described previously and to frequency of occurrence of events, captured by
increase the effectiveness of the decisions. Differ- repeated experiments whose outcomes are re-
ent decision methods have been developed to corded, while the fuzzy sets provide the appro-
overcome the uncertainty related problems. Some priate framework to evaluate the possibility of
of the methods that can be used in NPD process events rather than their probability (Garavelli
are summarized below (Davila, 2000; Doctor et al., et al., 1999).
2001; Infanger, 1994; Li, 2000; Trittle et al., 2000). Sensitivity analysis: It examines how the optimal
Probabilistic models: These include Monte Carlo solution and the optimal objective value are
Simulation and decision trees (Souder and Man- affected from the changes of the uncertainty
dakovic, 1986). Monte Carlo analysis uses the parameters (values and probabilities) that are
process of simulation to achieve a range of considered to be important (Parnell et al., 1999).
solutions to a problem. Decision tree is a diagram Scenario analysis: This technique has been
that provides a structured approach to decision- widely preferred and used by many decision
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O. Feyz’ıoglu 31

makers. Here, a combination of possible values of et al., 1999; Martino, 1995; Shipley et al., 2001;
the uncertainty parameters are assumed regarding Subramanian et al., 2001).
to different point of views (e.g. pessimistic, neutral A feasible starting point for evaluating any
and optimistic), and the resulting scenario is investment is to consider the investment’s revenues
solved. By solving the problem repeatedly for and risks (Markowitz, 1952). However, NPD
different scenarios and studying the solutions investments have some special characteristics that
obtained, the decision maker observes sensitivities make it very complicated to evaluate their costs,
and heuristically decides on an appropriate solu- and especially their benefits. First, they are
tion. intangible in nature. In many cases, monetary
These techniques can be used exclusively or in a measures cannot be used directly, but subjective
hybrid way. In this study, we have used fuzzy- arguments have to be applied also. Second, the
logic-based methods, which will be described in benefits of NPD investments are typically realized
details in the next sections. over a long period of time. Thus, using only
traditional investment evaluation techniques for
evaluating these investments is not sufficient.
4. Proposed fuzzy-logic-based decision-making Third, the success factors and the benefits are
approach recognized differently by various interest groups in
NPD investments. Fourth, these NPD investments
‘‘Project selection is pivotal to effective risk are irreversible in nature. Therefore, an appro-
reduction in new product development’’ (Cooper, priate decision criteria collection and evaluation/
1983). discrimination methodology has to be identified
Knowing that uncertainty highly disturb the while respecting these special attributes of NPD
accuracy of the decisions in NPD process, it is process and the requirements of the enterprise.
important to balance strategic management deci- Here we suggest using an integrated decision-
sions (develop the right product while allocating making approach for NPD under uncertainty.
resources) with tactical management decisions Focused on the fundamental stage of the NPD
(execution of projects by minimizing its risks process, it enables the identification of the best
factors). The strategic aspect of NPD alone new product to be developed together with its best-
requires the resolution of some very important suited development strategy while trying to mini-
questions, namely: mize the associated risk and uncertainty.
The first step of the method is to support top-
* Are we allocating our budget to the right new
level managers to evaluate multiple new product
product proposal?
ideas at a strategic level. At that level, the needed
* Do we have the right balance; of risk and
information for the evaluation is numerous and
return, of long and short term projects?
highly uncertain. Moreover, decision criteria do
* Are we working on the right projects and
not have an apparent superiority on each other
programs with the appropriate effort?
and estimated performances of ideas are imprecise.
As this strategic decision will have a great impact
It is clear that for success in NPD, it is critical to on the company’s future, we propose not to figure
determine what is ‘‘right’’ for the particular out the best new product idea at this early stage,
company. After defining the business objectives but rather choosing a nondominated subset of
for the NPD program and the overall strategic them. This set must consists of ideas proven to be
framework that will govern the development plan, superior from the remaining ones in some extent,
it is possible to move on to what is probably one of but cannot be differentiated from each other. In
the most problematic parts of NPD management: order to realize such a classification, responsible
the selection of NPD project. There is a compre- managers have to weight the proposed new
hensive literature of potential methods, which product ideas by taking into account the apparent
can be used for this selection phase (Cooper benefits and risks. The assessments are based on
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O. Feyz’ıoglu

the hierarchical structure shown in Fig. 2. Here, it we are confronted more or less with a tactical
is more convenient to use subjective judgments on decision rather than a strategic decision. Evalua-
ideas in linguistic terms like ‘‘fairly good’’ or tors’ judgments are once more aggregated to
‘‘poor’’. Then, individual opinions are pooled to obtain a refined result. The conclusion is not only
arrive at a final decision. This step make use of the the recognition of the best proposal but also the
pseudo-order fuzzy preference model (Roy and right order of the new product projects to be
Vincke, 1984; Wang, 1997) to discriminate the developed subsequently.
set of ideas into dominance and nondominance In the third and last step, we try to best figure
sets without the information about the relative out the necessary development strategy for the
importance of each evaluation criterion. preferred NPD project. Depending on the business
The first level’s winning ideas are further area and industry specific production means, these
evaluated in the second step in order to choose strategies are supposed and exposed by the project
the best one. Here, more product specific features responsive team. This is tactical decision where
are highlighted and investigated, and detailed selected strategies are criticized for different
NPD projects (namely also proposals) are pre- hierarchically leveled criteria by means of pairwise
pared. The decision criteria are weighted according comparisons and the best is chosen accordingly.
to their relative importance for the company. One of the methods that is intended for this type of
Again, we do not require exact judgments values evaluation is the fuzzy analytic hierarchy process
neither for criteria nor for projects. Criterion (FAHP) (Triantaphyllou, 2000) and is applied
importance is expressed with terms like ‘‘low’’ or here. The method itself possesses the capability to
‘‘high’’ similar to the desirability of the proposals join evaluators’ ideas without pressurizing on them
for these criteria. In this step the fuzzy weighted to make strict judgments on alternatives. Our
average (FWA) method (Vanegas and Labib, 2001) proposed three-step decision-making approach to
is used to find the ranking of projects. As projects evaluate and launch NPD projects is summarized
features are more involved at this decision point, in Table 1.

Fig. 2. NPD strategic hierarchic decision criteria.


Table 1
Proposed methodology for the fundamental evaluation in NPD process

Fundamental Major concerns Concerning Proposed methods Motivation


evaluation in NPD organizational
process level

Selection of new Selection of the most Strategic Pseudo-order fuzzy preference When the estimated performances

G. Buy
product ideas appropriate ideas in terms of model (Roy and Vincke, 1984) for all alternatives are imprecise,

. uk
company’s benefits and risks evaluating and ranking all of them

. ozkan,
in detail is not practical. The

.
pseudo-order preference model is
used to discriminate the set of

O. Feyz’ıoglu
alternatives into dominance and
nondominance sets without the

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information about the relative
importance of each criterion (Wang,

* / Int. J. Production Economics 90 (2004) 27–45


1997)

Selection of the best Evaluation of the new Strategic– Fuzzy weighted average method The fuzzy weighted average method
new product project product proposals according Tactical (Vanegas and Labib, 2001) used in this study is better than the
to selected decision criteria conventional fuzzy weighted average
and identification of the new method, because it produce less
product project launch order imprecision and the balance point of
consistent with their the fuzzy number is more realistic,
desirability and this point dmay be better basis
for making decisions (Vanegas and
Labib, 2001)

Selection of the best Selection of development Tactical Fuzzy AHP method Among the different fuzzy MCDM
development strategy strategies which minimize (Triantaphyllou, 2000) methods, AHP is the most widely
project uncertainties used and easily understandable one.
Fuzzy AHP is a natural extension of
this traditional method where
decision makers do not require to
express their assessments through
crisp values but rather they use fuzzy
numbers which is more suitable
when uncertainty is high

33
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O. Feyz’ıoglu

The next section is devoted to a case study 5.1. Strategic decision stage
for the new software development process in
order to clarify the subject. A brief intro- A fuzzy preference relation R on a set A is a
duction to fuzzy sets theory is given in Appendix fuzzy set on the product A  A; such that ma : A 
A for the unfamiliar readers about the fuzzy A-½0; 1: Let Pða; bÞAR be the fuzzy preference
logic. relation between a and b; where a; bAA: Then
Pða; bÞ þ Pðb; aÞ ¼ 1: Note that the higher value of
Pða; bÞ means a stronger intensity. The fuzzy
preference relation between two ideas a and b for
5. A case study in new software development criterion i is obtained by a pairwise comparison of
process gi ðaÞ and gi ðbÞ which show the linguistic perfor-
mance of ideas a and b; respectively. gi ðaÞ and gi ðbÞ
As Ulrish (2001) indicates, design and NPD are represented by fuzzy numbers. This paper
problems are common across the domains of utilizes Tseng and Klein’s (1989) approach based
physical goods, software and services. Even on Hamming distance to derive the preference
though our approach can be adapted to any relation between two proposals. If a and b are two
development process, we decided to apply it to fuzzy numbers, the fuzzy preference relationship is
software development since effective deployment given as
of computer software has emerged as one of the Dða; bÞ þ Dða-b; 0Þ
most important determinants of success in the Pða; bÞ ¼ ; ð1Þ
Dða; 0Þ þ Dðb; 0Þ
business world over the past decades. As informa-
tion technology infiltrates and plays a critical role where Dða; bÞ is the area where a dominates b
in all aspects of the value chain, firms are (none in Fig. 3), Dða; 0Þ the area of a (areas 1 and 2
continuing to investigate heavily in software in Fig. 3), Dðb; 0Þ the area of b (areas 2 and 3 in
(Harter et al., 2000). Fig. 3), Dða-b; 0Þ intersection areas of a and b
Software development is a special case for NPD (area 2 in Fig. 3). As easily seen from this
and there exists differences that are worthwhile to equation, preference relations are obtained by
notice between software production and tradi- using related areas under fuzzy membership
tional production: it is not repetitive, individual functions (Tseng and Klein, 1989). For the
attributes of the personnel have an extreme example given in Fig. 3, we have Pða; bÞ ¼ 0:18
influence on the quality of the product, the failure and Pðb; aÞ ¼ 0:82:
probability in one production step is highly When the relative importance of criterion is not
dependent to the previous steps (i.e. if conception really known, the pseudo-order preference model
phase is not adequately ended, then it is very likely can be used to set the alternatives into nondomi-
that the implementation phase will fail). This nance and dominance set. Three types of pre-
implies that uncertainty factors are dominants in ference relations are defined in terms of the fuzzy
whole production process. preference relations between two alternatives:
With this case study, we give the details of the 8a; bAA and iAC:
fuzzy-logic-based three-step evaluation methodol-
ogy starting from the selection of the most aPi b3Pðgi ðaÞ; gi ðbÞÞ Pðgi ðbÞ; gi ðaÞÞ > pi ;
appropriate new software idea to the selection of
the least risky and most value added software aQi b3Pðgi ðaÞ; gi ðbÞÞ Pðgi ðbÞ; gi ðaÞÞppi ;
project development strategy. The necessary data
aIi b3jPðgi ðaÞ; gi ðbÞÞ Pðgi ðbÞ; gi ðaÞÞjpqi ;
sets of this study are obtained from a small–
medium-sized Turkish software development com- where Pi depicts strict preference, Qi depicts weak
pany. However, we do not supply more projects’ preference and Ii depicts indifference. The pre-
details since the subject company has reserved the ference threshold pi and indifference threshold qi
information as confidential. are used to discriminate between indifference,
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O. Feyz’ıoglu 35

decision stage, we choose seven levels in linguistic


terms: ‘‘very poor (VP)’’, ‘‘poor (P)’’, ‘‘fairly poor
(FP)’’, ‘‘medium (M)’’, ‘‘fairly good (FG)’’, ‘‘good
(G)’’, ‘‘very good (VG)’’. The linguistic terms are
transformed into fuzzy numbers with Fig. 4 and
are listed in Table 2. The strategic managerial team
consisting of two company owners, four branch
managers and one sales and marketing manager
has joined together to rate new product ideas
based on their expertise and initiatives. Note that
all shown values in Table 2 are the aggregated ones
to represent the whole decision range of the
decision makers. The decision range is determined
by taking the worst and the best assessments
among evaluators for each comparison.
Fig. 3. Example of the fuzzy preference relation between a
and b:
According to Eq. (1), the fuzzy preference
relations among eight project ideas obtained and
strict preference, and weak preference of two displayed in Table 3.
alternatives for criterion i: According to the three A node of the outranking graph represents an
preference relations outranking is as follows (Roy alternative and an arc represents the outranking
and Vincke, 1984): relation between two alternatives. If idea a out-
8a; bAA and iAC: ranks b; then there is an arc from node a to b:
When the indifference threshold qi and the
ðOutrankingÞ preference threshold pi for all i are accepted, the
outranking graph can obtained according to
aSb3fbPi a is false; 8ig Eq. (2). By choosing qi ¼ 0:25 and pi ¼ 0:85 for
all i like in Wang (1997), the graph illustrated in
and jV j þ jW jXjY j Fig. 5 is obtained. It can be easily deduced that the
nondominance sets (SND) and dominance sets
ðIncomparabilityÞ (SD) are
aRb3 otherwise; ð2Þ SND ¼ f1; 3; 6g and SD ¼ f2; 4; 5; 7; 8g
where V ¼ fi j aPi bg is the set of a’s strictly and that ideas 1, 3 and 6 outrank ideas 2, 4, 5, 7
preferred to b; W ¼ fi j aQi bg is the set of a’s and 8. Therefore, these nondominated ideas are
weakly preferred to b; Y ¼ fi j bQi ag is the set of kept for further development.
b’s weakly preferred to a; and jxj represents the
cardinality of the set x: 5.2. Strategic–tactic decision stage
The above implies that a project a outranks b if
no criterion considers that concept b is strictly Bearing in mind that there exists n proposals to
preferred to a; and the number of criteria which be evaluated versus m criteria, let us denote Wi as
consider a is preferred to b is more than the the fuzzy number representing the importance of
number of criteria which consider that b is weakly the criterion Ci ; and Dij as the desirability of a jth
preferred to a: Otherwise, a is incomparable to b: proposal with respect to that criterion, for all
In our case, we have eight new software idea to iAI ¼ f1; 2; y; mg and for all jAJ ¼ f1; 2; y; ng:
be evaluated according to eight criteria given in Let also Dj as the overall desirability of the
Fig. 2. The universe of discourse is a finite set of proposal j:
fuzzy numbers used to express an imprecise level The a-cut of the over all desirability Dj of a
of performance of each criterion. In this strategic proposal j; calculated through fuzzy weighted
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O. Feyz’ıoglu

Fig. 4. The outranking graph of pseudo-order preference structure, when qi ¼ 0:25 and pi ¼ 0:85:

Table 2
Evaluation results for each project proposal in strategic decision stage

Project proposals

1 2 3 4 5 6 7 8

Profitability VG–G M–FP VG–M FG–M G–FP FG–M FP–P M–P


Efficiency FG–M M–P VG–G M–FP M–P FG–M FP–P M–FP
Strategic value VG–FG FG–FP FG–M G–M P–VP VG–FG FG–M G–FP
Business impact VG–G FG–FP VG–M FG–M G–M FG–M FP–P P–VP
Financial G–M FG–M G–FG FG–M M–FP M–FP G–FG FG–M
Technical M–FP FP–P FG–M FG–FP FP–P G–M FP–P FG–FP
Managerial VG–G FG–P FG–M FG–M M–FP G–M M–FP FP–P
Personel FG–FP M–FP FG–M G–M FP–P VG–G FG–M FP–P

average (FWA) (Vanegas and Labib, 2001) for m and


desirability levels represented by the fuzzy num- P a a
iAI Dij;b wi
bers D1j ; D2j ; y; Dmj ; with weights (fuzzy num- Daj;b ¼ min P a ð5Þ
bers) W1 ; W2 ; y; Wm ; is given by iAI wi

Daj ¼ ½Daj;a ; Daj;b ; ð3Þ for all jAJ: Here,


wai A½Wi;a
a a
; Wi;b  8iAI and 8aAð0; 1: ð6Þ
where
P a a As it can easily be understood, Daj;a and Daj;b re-
iAI Dij;a wi present, respectively, the lower and upper limits of
Daj;a ¼ min P a ð4Þ
iAI wi the a-cut Daj ; Daij;a and Daij;b represent, respectively,
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Table 3
The fuzzy preference relations between proposals for each criterion in strategic decision stage

1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8

Profitability Efficiency
1 0.50 1.00 0.68 0.95 0.87 0.95 1.00 1.00 1 0.50 0.84 0.05 0.82 0.84 0.50 0.95 0.82
2 0.00 0.50 0.13 0.18 0.34 0.18 0.64 0.56 2 0.16 0.50 0.00 0.44 0.50 0.16 0.56 0.44
3 0.32 0.87 0.50 0.63 0.65 0.63 0.97 0.88 3 0.95 1.00 0.50 1.00 1.00 0.95 1.00 1.00
4 0.05 0.82 0.37 0.50 0.56 0.50 0.95 0.84 4 0.18 0.56 0.00 0.50 0.56 0.18 0.64 0.50
5 0.13 0.66 0.35 0.44 0.50 0.44 0.75 0.69 5 0.16 0.50 0.00 0.44 0.50 0.16 0.56 0.44
6 0.05 0.82 0.37 0.50 0.56 0.50 0.95 0.84 6 0.50 0.84 0.05 0.82 0.84 0.50 0.95 0.82
7 0.00 0.36 0.03 0.05 0.25 0.05 0.50 0.44 7 0.05 0.44 0.00 0.36 0.44 0.05 0.50 0.36
8 0.00 0.44 0.12 0.16 0.31 0.16 0.56 0.50 8 0.18 0.56 0.00 0.50 0.56 0.18 0.64 0.50

Strategic value Business impact


1 0.50 0.76 0.70 0.63 1.00 0.50 0.70 0.70 1 0.50 0.96 0.68 0.95 0.83 0.95 1.00 1.00
2 0.24 0.50 0.38 0.34 0.96 0.24 0.38 0.46 2 0.04 0.50 0.30 0.38 0.34 0.28 0.72 0.96
3 0.30 0.62 0.50 0.44 1.00 0.30 0.50 0.56 3 0.32 0.70 0.50 0.63 0.58 0.63 0.97 1.00
4 0.37 0.66 0.56 0.50 1.00 0.37 0.56 0.60 4 0.05 0.62 0.37 0.50 0.44 0.50 0.95 1.00
5 0.00 0.04 0.00 0.00 0.50 0.00 0.00 0.03 5 0.17 0.66 0.42 0.56 0.50 0.56 0.96 1.00
6 0.50 0.76 0.70 0.63 1.00 0.50 0.70 0.70 6 0.05 0.72 0.37 0.50 0.44 0.50 0.95 1.00
7 0.30 0.62 0.50 0.44 1.00 0.30 0.50 0.56 7 0.00 0.28 0.03 0.05 0.04 0.05 0.50 0.80
8 0.30 0.54 0.44 0.40 0.97 0.30 0.44 0.50 8 0.00 0.04 0.00 0.00 0.00 0.00 0.20 0.50

Financial Technical
1 0.50 0.56 0.44 0.56 0.84 0.84 0.44 0.56 1 0.50 0.64 0.18 0.38 0.64 0.16 0.64 0.38
2 0.44 0.50 0.36 0.50 0.82 0.82 0.36 0.50 2 0.36 0.50 0.05 0.28 0.50 0.04 0.50 0.28
3 0.56 0.64 0.50 0.64 0.95 0.95 0.50 0.64 3 0.82 0.95 0.50 0.62 0.95 0.44 0.95 0.62
4 0.44 0.50 0.36 0.50 0.82 0.82 0.36 0.50 4 0.62 0.72 0.38 0.50 0.72 0.34 0.72 0.50
5 0.16 0.18 0.05 0.18 0.50 0.50 0.05 0.18 5 0.36 0.50 0.05 0.28 0.50 0.04 0.50 0.28
6 0.16 0.18 0.05 0.18 0.50 0.50 0.05 0.18 6 0.84 0.96 0.56 0.66 0.96 0.50 0.96 0.66
7 0.56 0.64 0.50 0.64 0.95 0.95 0.50 0.64 7 0.36 0.50 0.05 0.28 0.50 0.04 0.50 0.28
8 0.44 0.50 0.36 0.50 0.82 0.82 0.36 0.50 8 0.62 0.72 0.38 0.50 0.72 0.34 0.72 0.50

Managerial Personnel
1 0.50 0.97 0.95 0.95 1.00 0.83 1.00 1.00 1 0.50 0.62 0.38 0.34 0.72 0.04 0.38 0.72
2 0.03 0.50 0.34 0.34 0.56 0.31 0.56 0.66 2 0.38 0.50 0.18 0.16 0.64 0.00 0.18 0.64
3 0.05 0.66 0.50 0.50 0.82 0.44 0.82 0.95 3 0.62 0.82 0.50 0.44 0.95 0.05 0.50 0.95
4 0.05 0.66 0.50 0.50 0.82 0.44 0.82 0.95 4 0.66 0.84 0.56 0.50 0.96 0.17 0.56 0.96
5 0.00 0.44 0.18 0.18 0.50 0.16 0.50 0.64 5 0.28 0.36 0.05 0.04 0.50 0.00 0.05 0.50
6 0.17 0.69 0.56 0.56 0.84 0.50 0.84 0.96 6 0.96 1.00 0.95 0.83 1.00 0.50 0.95 1.00
7 0.00 0.44 0.18 0.18 0.50 0.16 0.50 0.64 7 0.62 0.82 0.50 0.44 0.95 0.05 0.50 0.95
8 0.00 0.34 0.05 0.05 0.36 0.04 0.36 0.50 8 0.28 0.36 0.05 0.04 0.50 0.00 0.05 0.50

the lower and upper limits of the a-cut Daij ; and Wi;a
a a
Wi;b ; of the a-cut Wia for all iAI and all aAð0; 1:
a
and Wi;b represent, respectively, the lower and Then condition in Eq. (6) can be relaxed to
upper limits of the a-cut Wia : The ‘‘min’’ and wai AfWi;a
a a
; Wi;b g 8iAI and 8aAð0; 1 ð7Þ
‘‘max’’ operators take the minimum and maximum
values, respectively, that can be calculated through (see proof in Vanegas (1999) and Vanegas and
the combination of the wi in all the possible ways. Labib (2001)).
The minimum and maximum values in Eqs. (4) and A simple ranking method, which seems to be
(5) are always obtained by taking (real) values adequate for applications in which fuzzy numbers
a
of weight wi equal to the extreme values, Wi;a or represent possibility distributions like here, is the
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O. Feyz’ıoglu

increasing fidelity, these submodels are called the


applications composition, early design, and post-
architecture models. However, our work differs
from the COCOMO II model in that we use fuzzy
logic to evaluate the performance of proposals
versus criteria. An illustrative evaluation is given
in Table 4 where the examined criteria, their rated
importance for the firm and the evaluations of the
proposals are shown. We use appropriate trian-
gular fuzzy numbers as indicated in Fig. 6 to
capture the linguistic terms of ‘‘very low’’ (VL),
‘‘low’’ (L), ‘‘medium low’’ (ML), ‘‘medium’’ (M),
‘‘medium high’’ (MH), ‘‘high’’ (H) and ‘‘very
high’’ (VH). The individual assessments of the
decision makers are aggregated such that
Fig. 5. The outranking graph of pseudo-order preference
structure, when qi ¼ 0:25 and pi ¼ 0:85:
Dagg
j ¼ ð1=nÞ#ðD1j "D2j "?"Dkj Þ; ð9Þ
calculation of balance points. A balance point of a
fuzzy number is the x coordinate of the centroid of
the area under the membership function curve and where Dkj stands for decision maker k judgment on
calculated such that the desirability of proposal j calculated through
Z b Z b FWA and Dagg j for the aggregate assessment.
x% ¼ mðxÞx dx mðxÞ dx; ð8Þ The development team of the company has
a a prepared detailed projects for the first stage
where x% is the balance point. Balance point prosperous ideas and presented to the top man-
calculation is also known as a defuzzification agers. Then, managers’ individual judgments on
method. projects and on the importance of the decision
In order to rate the proposals, we benefit from criteria are collected. After calculating the average
the main criteria considered in COCOMO II assessment by means of Eq. (9), the overall
model [Web Address: http://sunset.usc.edu/re- desirability levels of proposals 1, 3 and 6 are
search/COCOMOII/]. This model allows one to about ‘‘medium’’, ‘‘medium towards medium low’’
estimate the cost, effort, and schedule when and ‘‘high towards medium high’’ (see Fig. 6).
planning a new software development activity. It Here, the balance points of proposals 1, 3 and 6
consists of three submodels, each one offering are calculated as 0.51, 0.46 and 0.81, respectively.
increased fidelity the further along one is in the Therefore, the best one is project 6 that has the
project planning and design process. Listed in highest balance point.

Table 4
Linguistic description of desirability and importance levels

Importance Proposal desirability level

Proposal 1 Proposal 3 Proposal 6

Scale drivers Medium high Medium Low Medium high


Product attributes Medium low Medium low Medium high High
Platform attributes Medium High Medium low High
Personnel attributes High Medium Medium high Very high
Project attributes Medium Medium low Medium Medium high
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Fig. 6. Overall desirability levels of the proposals calculated through the NFWA.

5.3. Tactic decision stage superior means of representing pairwise compar-


isons in the AHP judgment matrix. A comparison
The analytic hierarchy process (AHP) (Saaty, matrix R* is constructed for the n-strategy selection
1977, 1980) uses the principle of comparative problem, in which pairwise comparisons are
judgments to construct pairwise comparisons of triangular fuzzy numbers a* ij for all
the relative importance of elements at some given i; jAf1; 2; y; ng; such that
level of a criteria hierarchy with respect to shared R* ¼
criteria or property at the level above, giving rise 2 3
ð1; 1; 1Þ a* 12 a* 13 ? a* 1ðn 1Þ a* 1n
to a weight matrix. Priorities are synthesized from 6 7
6 1=a* 12 ð1; 1; 1Þ a* 23 ? a* 2ðn 1Þ a* 2n 7
the second level down from multiplying local 6 7
6 ^ ^ ^ ^ ^ ^ 7:
priorities by the priority of their corresponding 6 7
6 7
criterion in the level above and adding for each 4 1= *
a 1ðn 1Þ 1=a* 2ðn 1Þ 1=a* 3ðn 1Þ ? ð1; 1; 1Þ a* ðn 1Þn 5
element in a level according to the criterion it 1=a* 1n 1=a* 2n 1=a* 3n ? 1=a* ðn 1Þn ð1; 1; 1Þ
effects. The triangular fuzzy number a* ij ¼ ðlij ; mij ; uij Þ is
A traditional AHP-based approach requires obtained for each criteria and alternative strategy
construction of comparison matrices in which the by the integration of different members of the
relative importance among attributes is expressed project team such that
as precise numbers on a standard scale (usually !1=K
from 1 to 10). AHP technique requires decision YK
lij ¼ minðlijk Þ; mijk ¼ mijk ;
makers to express their preferences for attributes k¼1
using crisp numbers, and calculates a weight
uij ¼ maxðuijk Þ; ð10Þ
vector that quantifies the level of importance of
attributes. However, precise numbers fail to where lijk ; mijk and uijk are the lower width, mean
contain the subjectivity and vagueness in deci- and upper width, respectively, for the decision
sion-making in NPD. We overcome this difficulty maker k; and the project team has K members.
of subjectivity and vagueness in the strategy lijk ; mijk and uijk can take any values between 1 and
1
selection problem by using fuzzy numbers as a 10 and also their reciprocals (i.e. from 10 to 1) as
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O. Feyz’ıoglu

Fig. 7. Hierarchy of decision criteria in software development strategy selection.

original AHP provided that lijk pmijk puijk : Next, Note that l*ij is the performance measure of the
the fuzzy eigenvector of the matrix R* is estimated. alternative i for the criteria j: Finally, the weighted
According to Saaty (1980), the right principal average of each alternative is obtained by multi-
eigenvector of the matrix expresses the importance plying each criteria weight w* j (given again as a
of the alternatives. The combination of Saaty’s fuzzy triangular number) by the related alternati-
eigenvector approximation with the fuzzy ve’s performance. In other words, we require
arithmetic operations leads to the following p* i ¼ ðw* 1 #l* i1 Þ"ðw* 2 #l* i2 Þ"?"ðw* m #l* im Þ: ð12Þ
equation:
This calculation process continues level by level in
l* i ¼ ða* i1 #a* i2 #?#a* in Þ1=n ; iAf1; 2; y; ng; ð11Þ the hierarchical structure until the finite perfor-
mance of alternatives is computed. The ranking of
 
where l* ¼ l* 1 ; l* 2 ; y; l* n is the right principal alternatives can be obtained by defuzzifying the
eigenvector. Then we normalize the relative final scores p* i ¼ ðlpi ; mpi ; upi Þ with the following
performance measures of alternatives for a given method:
criterion by dividing the values with the sum of all. rpi ¼ ½ðupi lpi Þ þ ðmpi lpi Þ=3 þ lpi 8i: ð13Þ
Therefore, if we denote l* 0 ¼ ðl* 01 ; l* 02 ; y; l* 0n Þ as the
Obviously, maxi rpi will be the best alternative.
adjusted performance measures of alternatives,
The hierarchical structure of decision criteria in
then we can construct the following fuzzy decision
software development strategy selection is shown
matrix for each subcriteria:
in Fig. 7. More insight about the significance of
C1 C2 ? Cm these criteria can be found in Web Address: http://
2 3 sunset.usc.edu/research/COCOMOII/. In our sta-
A1 l* 11 l* 12 ? l* 1m ted SME, we have four general project teams. The
6* 7
Z* ¼ A2 6 l21 l* 22 ? l* 2m 7 managers of these teams are decided to evaluate
6 7:
^ 6 ^ ^ ^ ^ 7 three development strategies versus 5 main criteria
4 5
and 21 subcriteria. In order to reduce space, we
An l* n1 l* n2 ? l* nm give in Table 5 the aggregated assessments only for
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Table 5
Pairwise comparison matrices of development strategies for project attributes’ subcriteria

Strategy 1 Strategy 2 Strategy 3

Criteria: TOOL
Strategy 1 (1.00, 1.00, 1.00) (0.33, 2.05, 4.00) (0.33, 1.78, 4.00)
Strategy 2 (0.25, 0.49, 3.00) (1.00, 1.00, 1.00) (0.25, 0.66, 4.00)
Strategy 3 (0.25, 0.56, 3.00) (0.25, 1.52, 4.00) (1.00, 1.00, 1.00)

Criteria: SCED
Strategy 1 (1.00, 1.00, 1.00) (0.33, 1.32, 4.00) (0.33, 1.43, 5.00)
Strategy 2 (0.25, 0.76, 3.00) (1.00, 1.00, 1.00) (0.25, 0.66, 4.00)
Strategy 3 (0.20, 0.70, 3.00) (0.25, 1.52, 4.00) (1.00, 1.00, 1.00)

Criteria: SITE
Strategy 1 (1.00, 1.00, 1.00) (0.50, 2.05, 5.00) (0.50, 1.64, 5.00)
Strategy 2 (0.20, 0.49, 2.00) (1.00, 1.00, 1.00) (0.50, 2.41, 5.00)
Strategy 3 (0.20, 0.61, 2.00) (0.20, 0.42, 2.00) (1.00, 1.00, 1.00)

‘‘Project attributes’’ and its subcriteria: use of 6. Concluding remarks and perspectives
software tools (TOOL), multisite development
(SITE) and required development schedule The managers spend most of their time to take
(SCED). The pairwise comparison matrices shown critical decisions in each level of the organizational
in Table 5 are constructed first by collecting hierarchy. NPD is one of the most important
individual judgments and then by applying activities covering crucial decisions for the survival
Eq. (10) to combine all of them. When this step of a company. This implies that the decision-
is repeated for all subcriteria, we use Eq. (11) to making process must be timed and effective. For
calculate all performances of alternative strategies this reason, this work suggests a basic integrated
and prepare the fuzzy decision matrices shown in decision-making approach for NPD under uncer-
Table 6. It can be seen from the table that each tainty. Focused on the fundamental stages of the
criterion’s weight is shown beneath criterion NPD process, it enables the identification of the
abbreviation. The weight represents the combined best new product to be developed together with its
opinions of decision makers about the importance best-suited development strategy while trying to
of that criterion and it is calculated by using minimize the associated risks.
Eq. (10). Note that the mean values of subcriteria Simplicity does not imply direct applicability
for a given upper decision criterion must sum up to and other traditional evaluation methods may be
1 for the sake of the robustness of the method. incorporated in each selection phase to our
Therefore, we normalize the criteria weights as we methodology. However, we claim that the applica-
explained previously for the relative performance tion of our method will be a good practice in terms
measures of alternatives. Next, Eq. (12) is applied of the aggregation and purification of the sub-
to obtain the performance of strategies against jective judgments and to clarify the big picture,
main criteria and results are shown in Table 7. which is covered by uncertainties. Besides, the
Again by using Eq. (12), the final ranking is company’s authorities participated in this case
obtained such that p* 1 ¼ ð0:03; 0:44; 4:85Þ; p* 2 ¼ study have also approved that our approach has a
ð0:03; 0:28; 4:03Þ and p* 3 ¼ ð0:02; 0:28; 3:75Þ: Thus, significant support to improve the quality of the
after applying Eq. (13) to defuzzify these numbers decision-making.
and normalizing the crisp values, we get rp1 ¼ Our proposed methodology requires tedious
0:39; rp2 ¼ 0:32 and rp3 ¼ 0:29: This implies that calculations which may mean some practitioners
the development strategy 1 has to be selected for avoid using it. Actually, the necessary computa-
the chosen project. tions concerning the assessments have been carried
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Table 6
Fuzzy decision matrices for all subcriteria

Scale drivers [0.15, 0.24, 0.28]

Strategies PREC FLEX RESL TEAM


(0.14, 0.17, 0.42) (0.16, 0.30, 0.34) (0.21, 0.31, 0.41) (0.18, 0.22, 0.34)

Strategy 1 (0.05, 0.29, 2.56) (0.08, 0.47, 2.01) (0.06, 0.46, 2.40) (0.08, 0.48, 1.87)
Strategy 2 (0.05, 0.21, 2.00) (0.06, 0.30, 1.69) (0.05, 0.21, 1.88) (0.06, 0.20, 1.49)
Strategy 3 (0.05, 0.50, 2.38) (0.06, 0.22, 1.34) (0.05, 0.34, 1.88) (0.06, 0.32, 1.70)

Product attributes [0.05, 0.12, 0.25]

Strategies RELY DATA CPLX RUSE DOCU


(0.17, 0.23, 0.36) (0.17, 0.18, 0.23) (0.31, 0.34, 0.35) (0.09, 0.13, 0.17) (0.08, 0.12, 0.14)

Strategy 1 (0.08, 0.37, 1.65) (0.11, 0.47, 1.48) (0.07, 0.43, 2.01) (0.05, 0.25, 2.40) (0.08, 0.42, 2.06)
Strategy 2 (0.06, 0.27, 1.65) (0.08, 0.34, 1.60) (0.07, 0.35, 1.70) (0.05, 0.51, 2.03) (0.06, 0.21, 1.52)
Strategy 3 (0.07, 0.36, 1.45) (0.06, 0.19, 0.94) (0.05, 0.21, 1.35) (0.05, 0.25, 1.71) (0.05, 0.37, 1.74)

Platform attributes [0.09, 0.18, 0.33]

Strategies TIME STOR PVOL


(0.31, 0.36, 0.57) (0.32, 0.40, 0.50) (0.21, 0.24, 0.25)

Strategy 1 (0.12, 0.53, 1.91) (0.08, 0.48, 1.86) (0.07, 0.28, 1.84)
Strategy 2 (0.06, 0.19, 1.31) (0.06, 0.29, 1.59) (0.07, 0.49, 1.98)
Strategy 3 (0.06, 0.28, 1.04) (0.05, 0.23, 1.53) (0.05, 0.23, 1.16)

Project attributes [0.12, 0.18, 0.34]

Strategies TOOL SCED SITE


(0.16, 0.30, 0.37) (0.22, 0.45, 0.53) (0.13, 0.25, 0.34)

Strategy 1 (0.07, 0.49, 1.98) (0.07, 0.41, 2.18) (0.09, 0.47, 2.04)
Strategy 2 (0.06, 0.22, 1.80) (0.05, 0.26, 1.84) (0.07, 0.33, 1.50)
Strategy 3 (0.06, 0.30, 1.80) (0.05, 0.33, 1.84) (0.05, 0.20, 1.11)

Personnel attributes [0.18, 0.28, 0.36]

Strategies ACAP PCAP PCON PEXP AEXP LTEX


(0.21, 0.21, 0.34) (0.15, 0.18, 0.28) (0.24, 0.26, 0.41) (0.09, 0.11, 0.18) (0.04, 0.08, 0.17) (0.13, 0.16, 0.29)

Strategy 1 (0.06, 0.50, 2.51) (0.10, 0.52, 1.77) (0.10, 0.48, 1.77) (0.07, 0.34, 1.85) (0.06, 0.29, 1.93) (0.09, 0.43, 1.56)
Strategy 2 (0.04, 0.20, 2.12) (0.08, 0.28, 1.18) (0.06, 0.25, 1.40) (0.07, 0.44, 1.72) (0.06, 0.50, 2.29) (0.07, 0.24, 1.24)
Strategy 3 (0.04, 0.30, 2.12) (0.07, 0.20, 1.03) (0.06, 0.27, 1.40) (0.05, 0.22, 1.56) (0.06, 0.21, 1.43) (0.08, 0.33, 1.42)

Table 7
Fuzzy decision matrix for main criteria

Strategies Main criteria

Scale drivers Product attr. Platform attr. Project attr. Personnel attr.
(0.14, 0.24, 0.42) (0.05, 0.12, 0.25) (0.09, 0.18, 0.33) (0.12, 0.18, 0.34) (0.18, 0.28, 0.36)

Strategy 1 (0.05, 0.44, 3.38) (0.06, 0.40, 2.34) (0.08, 0.45, 2.48) (0.04, 0.45, 2.58) (0.07, 0.45, 3.19)
Strategy 2 (0.04, 0.23, 2.69) (0.05, 0.34, 2.11) (0.05, 0.30, 2.04) (0.03, 0.26, 2.15) (0.05, 0.28, 2.69)
Strategy 3 (0.04, 0.33, 2.80) (0.04, 0.26, 1.74) (0.05, 0.25, 1.65) (0.03, 0.29, 2.01) (0.05, 0.26, 2.52)
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out by the authors and only the final results have standing to an expression like ‘‘performance close
been presented to the participants. to 90’’, which is vague (fuzzy).
The following points will be the natural exten-
sion of our work: A.2. Fuzzy sets and fuzzy numbers
As we have tested the validity of our methodol-
ogy with the given application, we are now Fuzzy sets were first introduced by Zadeh (1965)
developing a decision support tool that will and are a generalization of crisp sets. The degree of
provide user-friendly graphical interfaces and hide membership of an individual in a fuzzy set
the necessary computations. Thus, a broader expresses the degree of compatibility of the
industrial user group will have the opportunity individual with the concept represented by the
to apply the proposed approach without expert fuzzy set. Each fuzzy set, A; is defined in terms of a
intervention. relevant universal set, X ; by a function called a
The financial dimension has not been investi- membership function which assigns to each
gated. In future research, this subject will be element x of X a number AðxÞ in the closed
primarily considered for different selection phases interval ½0; 1: This characterizes the degree of
while keeping in mind the fuzziness of the cash membership of x in A: Therefore, membership
flows. functions are of the form
Similar approaches have to be provided to
increase the efficiency of other critical decisions mA ðxÞ : X -½0; 1: ðA:1Þ
in NPD process.
We have employed different ranking, selection Larger values of mA ðxÞ imply higher degrees of set
and multi-criteria decision-making techniques in membership. The fuzzy set A is normal, if
our work, which we consider the most appro- supx mA ðxÞ ¼ 1: The fuzzy set A is defined as
priate. The influence of other methods on the final convex if and only if mA ðlx1 þ ð1
quality and accuracy of decisions has to be lÞx2 ÞXminðmA ðx1 Þ; mA ðx1 ÞÞ for all x1 ; x2 ARn and
evaluated. for all lA½0; 1: A normal and convex fuzzy set
defined on Rn whose membership function is
piecewise continuous is called a fuzzy number. In
Acknowledgements other words, a fuzzy number represents the
conception of a set of real numbers close to x; %
We thank the anonymous referees for their where x% is the number being fuzzified. As an
valuable comments and suggestions, which have example, a triangular fuzzy number is expressed as
improved the final quality of the paper. 8
< 0;
> xoa or x > c;
mA ðxÞ ¼ ðx aÞ=ðb aÞ; apxpb; ðA:2Þ
>
:
Appendix A ðx cÞ=ðb cÞ; bpxpc:

A.1. Fuzzy set theory a-cut of a set. The concept of an a-cut of a fuzzy
set is especially useful for the arithmetic operations
Fuzzy analysis is an important tool to represent on fuzzy numbers which will be given next. a-cut
vagueness and a kind of imprecision and un- of a fuzzy set A is the set Aa of elements x; such
certainty. The term fuzzy is meant to represent that their degree of membership in the set A is at
expressions and judgments that have no clear least equal to a (Klir and Yuan, 1995). Therefore,
(crisp) value or boundary. For example, when we the a-cut is then expressed by
express that the performance of the personnel is Aa ¼ fxAX j mA ðxÞXag: ðA:3Þ
outstanding, this linguistic expression is fuzzy
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