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Product Portfolio Management - Finance

4960 runs

Added by AnyLogic

Application area: Product management

Simulation method: Agent Based

Product Portfolio Management

This model of the research and development (R&D) process in a firm. Each firm’s product has its development cost, development time, sales and market lifetime as well as predictability of those characteristics. First, a product is placed into candidate pool. Firm performs products revision every month and starts new product development whenever firm’s R&D budget allows. Products with higher ROI are started first. A product, which has estimated ROI lower than the specified threshold is killed. When the development of the project is finished, it enters the market and starts bringing profit to the firm. All basic financial characteristics of the firm as well as policy control tools are displayed in the control panel. You can change the fraction of total revenue that goes into R&D budget, the minimum ROI a product needs to survive during Go/Kill revisions, and invest into R&D budget. Bubble charts are used to visualize the dynamics of products.

The model was created with AnyLogic - simulation software / Product management

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