Abstract—In this study, a framework is suggested to prioritize the handling of external factors or uncontrollable variables that affect the success of new product development (NPD) projects. Many NPD projects fail because of unexpected changes that arise in the environment surrounding a firm. In particular, the success of a project is partly affected by various external factors such as the economic cycle, technological development, customer needs, currency exchange rates, inflation rate, oil price, and stock prices. Therefore, a project manager requires a framework to measure the impacts of these factors scientifically. Here, a multi-response optimization (MRO) method with a loss function is used for developing such a framework. The success factors and external factors of NPD projects are set as the dependent and independent variables, respectively. A priority value generated by this method represents the optimized weight given to a success factor. The difference between the optimized and original weights is then minimized by a given loss function. An illustrative example is described to show how the developed framework can be used to determine the optimized priority with minimum loss. The results of this study may be useful for effective GO/STOP decisions at each phase of the development process for a given NPD project of a firm.

Index Terms—NPD project, success factors, external factors, multi-response optimization, loss function.

Cite: Chan-sik Kim, Jong-seong Kim, Hoo-GonChoi, and Se Won Lee, "Evaluating Effects of External Factors on Success of NPD Projects," Journal of Advanced  Management Science, Vol. 1, No. 1, pp. 118-123, March 2013. doi: 10.12720/joams.1.1.118-123