EAGER: Negotiated Resource Sharing Strategies to Facilitate New Product Introductions

North Carolina State University, Raleigh NC

Investigators

Abstract

The introduction of new products is an important basis for competition in many industries. Effective management of new product introductions requires collaboration and coordination between different units such as sales and marketing, manufacturing, and product engineering. Each unit controls some critical resources and information, but depends on resources and information from other units to perform its function. The resulting competition for manufacturing capacity between units with different objectives, often arbitrated by a central decision maker, may result in delayed, suboptimal decisions. This EArly-concept Grant for Exploratory Research (EAGER) project studies the opportunity for new, decentralized approaches that encourage information sharing among functional units to provide better alternatives to centralized control. The project will yield new insights into multiparty negotiation as well as contributing to the national welfare through insights into how to better manage new product introduction in industrial, non-profit and defence environments. The award will provide support for a graduate student working with the PI. This project will evaluate the merits of two novel approaches to structuring decentralized decision making. The first will involve the emerging field of algorithmic game theory to develop computationally efficient approximation algorithms for determining equilibrium solutions for these problems. The second will involve the study of combinatorial auctions, where each unit bids for manufacturing capacity across different time periods. The extensive literature on game theory and combinatorial auctions present an opportunity to develop novel formulations of this problem. Several streams of research address different aspects of the problem, but none is currently capable of modelling even simplified versions of the problem in all aspects. Hence at the current stage of knowledge it is not clear what direction a concerted attack on this problem with these tools should take. The objective of this EAGER project is to clarify this issue, identifying the most promising lines of attack while eliminating those unlikely to succeed.