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Dow AgroSciences Uses Simulation-Based Optimization to Schedule the New-Product Development Process

Author

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  • Matthew H. Bassett

    (Dow AgroSciences, 9330 Zionsville Road, Indianapolis, Indiana 46268)

  • L. Leslie Gardner

    (University of Indianapolis, 1400 East Hanna Avenue, Indianapolis, Indiana 46227)

  • Kent Steele

    (Dow AgroSciences, 9330 Zionsville Road, Indianapolis, Indiana 46268)

Abstract

Dow AgroSciences has improved its bottom line by using simulation-based optimization to reduce the time and expense of moving a portfolio of products to market. We examined mathematical programming approaches for scheduling new-product development but found that the solution of these formulations is intractable for problems of practical size that include resource constraints. We developed a simulation-based framework for generating feasible solutions, which can be used with any heuristic optimization approach (for example, tabu search or genetic algorithms). The heuristic optimization algorithms operate on a solution space consisting of the precedence relationships among activities in the new-product development process. The firm implemented this approach via a Six Sigma project. From 1998 to 2004, it saved several million dollars based on the schedules determined using simulation-based heuristic optimization.

Suggested Citation

  • Matthew H. Bassett & L. Leslie Gardner & Kent Steele, 2004. "Dow AgroSciences Uses Simulation-Based Optimization to Schedule the New-Product Development Process," Interfaces, INFORMS, vol. 34(6), pages 426-437, December.
    • Handle: RePEc:inm:orinte:v:34:y:2004:i:6:p:426-437
    DOI: 10.1287/inte.1040.0099
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    References listed on IDEAS

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    1. Fred Glover, 1990. "Tabu Search: A Tutorial," Interfaces, INFORMS, vol. 20(4), pages 74-94, August.
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    Cited by:

    1. Benedikt Müller-Stewens & Klaus Möller, 2017. "Performance in new product development: a comprehensive framework, current trends, and research directions," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(2), pages 157-201, May.

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