The value of using sequential (SE) and concurrent engineering (CE) processes for new product development (NPD) is quantitatively determined by means of the maximum expected payoff method. This method models a process into a sequence of intervals and calculates the value of the maximum benefit as a result of optimum decisions during each interval. SE and CE processes are evaluated in terms of the parameters: simultaneity and intensity of interaction. The maximum expected payoff method shows under what conditions SE or CE is best, and the effect of incomplete information and resultant rework. Results are compared to actual NPD processes with good agreement.
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