Expenditure patterns for risky R and D projects
- 1 March 1971
- journal article
- research article
- Published by Cambridge University Press (CUP) in Journal of Applied Probability
- Vol. 8 (01) , 60-73
- https://doi.org/10.1017/s0021900200110939
Abstract
Summary: In this paper we derive the time pattern of optimal planned expenditures for R and D projects in which the total effort required to complete the research satisfactorily is not known. Theorem 1 summarizes our results under alternative assumptions regarding the behavior of the function governing the supposed probability of completing the R and D satisfactorily with incremental effort. In addition, an easily employed necessary condition for the R and D project to be worthwhile is provided in Theorem 2.Keywords
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