Title: Fast and frugal heuristics for new product screening - is managerial judgment 'good enough?'

Authors: Fatima M. Albar; Antonie J. Jetter

Addresses: Department of Engineering and Technology Management, Portland State University, 1900 SW 4th Avenue, Portland, OR 97207-0751, USA; Faculty of Computing and Information Technology, King Abdul-Aaziz University, Jeddah, 22254, Saudi Arabia ' Department of Engineering and Technology Management, Portland State University, 1900 SW 4th Avenue, Portland, OR 97207-0751, USA

Abstract: Project screening in the fuzzy front-end of product development is dominantly based on managerial judgment, yet little is known about the quality of heuristic screening decisions. This research models three commonly discussed fast and frugal (F&F) heuristics for project screening (take-the-best, tallying and elimination-by-aspect) and explores their performance. An illustrative dataset of 52 new product development projects is used to compare the performance of F&F heuristics against that of regression models, which reflect compensatory judgment behaviour. The findings uncover a 'less is more' effect that justifies the use of simple heuristics in early stage product screening; two out of the three F&F heuristics reach accuracies of over 80% for project selection and 70% for project rejection and the best F&F model, tallying, performs similarly to the best regression model. The findings warrant a fresh look at managerial screening heuristics as 'good enough' decision making approach.

Keywords: new product screening; project selection; project rejection; project screening; fuzzy front-end; new product development; NPD; fast and frugal heuristics; take the best; tallying; elimination by aspect; decision making; managerial judgment.

DOI: 10.1504/IJMDM.2013.054461

International Journal of Management and Decision Making, 2013 Vol.12 No.2, pp.165 - 189

Available online: 11 Jun 2013 *

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