Paper Info
Title
Technical Note—Waterfall and Agile Product Development Approaches: Disjunctive Stochastic Programming Formulations
Abstract
AbstractWhen engaging in the development of new products, the primary objective of start-up companies is to generate a specified return level quickly and with high confidence. Achieving this goal is complicated because of uncertainties in projects’ returns and durations. In the study titled, “Waterfall and Agile Product Development Approaches: Disjunctive Stochastic Programming Formulations,” Kettunen and Lejeune develop new disjunctive chance-constrained programming models that capture this goal. The first static model reflects the traditional waterfall product development process, whereas the second one is dynamic and depicts the agile product development process. Kettunen and Lejeune design a novel reformulation method and a decomposition algorithm and use them on a new product development problem encountered by a U.S.-based software start-up company. The results reveal that high confidence in reaching a certain return can be achieved by investing in projects with a longer development time and higher risk. Additionally, overlooking the capability to make dynamic decisions, as allowed by the agile approach, leads to overestimating the time needed to obtain the targeted return.The periodic selection of new product development (NPD) projects is a crucial operational decision. The main goals of start-up companies in NPD are to attain a reliable return level and deliver this return level fast. Achieving these goals is complicated because of uncertainties in projects’ returns and durations. We develop new disjunctive stochastic programming models that capture the above-mentioned NPD goals. The first stochastic model is static, representing the traditional waterfall product development process, whereas the second one is dynamic, representing the agile product development process. We design a reformulation method and a decomposition algorithm to solve a problem encountered by a U.S.-based software start-up company. Our results indicate counterintuitively that high reliability in attaining a targeted return may be achieved by investing in projects with a longer development time and higher risk. Furthermore, we show that if the capability to make dynamic decisions is overlooked while available, the time to attain the targeted return is overestimated.
Year
DOI
Venue
2020
10.1287/opre.2019.1977
Periodicals
Keywords
DocType
Volume
product development,waterfall,agile,disjunctive chance constraint,stochastic programming
Journal
68
Issue
ISSN
Citations 
5
0030-364X
0
PageRank 
References 
Authors
0.34
0
2
Name
Order
Citations
PageRank
Janne Kettunen100.34
Miguel A. Lejeune225321.95