Managing Cost Overrun and Risk in New Product Development Projects: A Multi-Attribute Decision-Making Approach Using R-method

New product development (NPD) projects are inherently complex and carry inherent risks, making effective cost overrun and risk management crucial for project success. One of the primary causes of cost overruns in NPD projects is changes in project scope. Such changes can occur due to various factors, including evolving customer requirements, regulatory modifications, or advancements in technology. Decision-making in cost overrun is a key issue; here in present work, the author would like to use a multi-attribute decision-making approach that utilizes the R-method to address cost overrun and risk management in NPD projects. The proposed approach employs a comprehensive set of criteria, namely cost, schedule, quality, innovation, production capability, performance, and risk. These criteria are used to evaluate different alternatives for effectively managing cost overrun and risk at different stages of the project. The R-method is then employed to rank the alternatives based on their scores, which are calculated using the assigned weights for each criteria. To validate the effectiveness of the proposed approach, it is applied to a case study involving an NPD project with cost overrun and risk. The results demonstrate that this approach enables project managers to make well-informed decisions and effectively manage cost overrun and risk in NPD projects. Furthermore, this method proves valuable in vendor selection for PCBs manufacturing. Information derived from this approach can be utilized to proactively mitigate the risk of cost overruns by considering measures such as increasing the project budget and change in project scope.