Showing papers in "IEEE Transactions on Engineering Management in 1999"

A practical R&D project-selection scoring tool

Abstract: An improved scoring tool for research and development (R&D) project evaluation and selection is presented that ranks project alternatives based on the criteria of relevance, risk, reasonableness, and return. The scoring algorithm explicitly incorporates tradeoffs among the evaluation criteria and calculates a relative measure of project value by taking into account the fact that value is a function of both merit and cost. Implementation of the selection method in a federal research laboratory is discussed. A comprehensive overview of the R&D project selection literature is included.

Collaborating with suppliers in product development: a US and Japan comparative study

Abstract: Despite its risks, an increasing number of buyers share design work with their suppliers. However, the outsourcing of design work has been relatively neglected in the literature. Based on mail survey data from 174 US and 122 Japanese automotive component suppliers with product design capability, this study investigates the degree of supplier involvement in design and the factors leading to supplier involvement. The two strongest predictors of the degree of early supplier involvement in design in both Japan and the United States are the degree of technological uncertainty and supplier technical capabilities. Automotive companies are more likely to outsource designs of high uncertainty and select suppliers of high technical capability for design outsourcing. Technological uncertainty also has interaction effects-in the United States, high uncertainty makes customers want to give greater design responsibility to highly technically capable suppliers and those who are most dependent on them as a percent of supplier sales. Overall, the study supports notions of convergence between the US and Japanese supplier management practices in joint product development.

Assessing technological barriers to telemedicine: technology-management implications

Abstract: Telemedicine, the use of information technology to deliver health care from one location to another, has the potential to increase the quality and access to health care and to lower costs. This growth of telemedicine installations is occurring even as the utilization rates for installed telemedicine projects are falling well below expectations. Drawing on data collected from three operational telemedicine projects involving different clinical telemedicine applications, we examine how the technological barriers to telemedicine are impacting telemedicine utilization rates. Addressing technological barriers is a necessary but not sufficient condition if telemedicine is to fulfil its promise, and it is predominantly only after such barriers are addressed that the other barriers-professional, legal, and financial-come to the fore. Our findings support end-user and technical training as major barriers but do not support the quality of the video, system reliability, or the perceived inconvenience for physicians to use the equipment as barriers to telemedicine. The mismatch between the sophistication of the technology and end-user requirements for clinical activities and patient confidentiality and privacy issues were supported as barriers, but how they impacted telemedicine utilization was different than expected. Finally, unsatisfactory sound quality of the telemedicine equipment was identified as a frequent and unexpected barrier to telemedicine utilization rates.

Managing communication in global product development teams

Abstract: Global new product development teams (GNPDTs) are becoming more and more prevalent due to the growing need for companies to compete in a global economy. Managing communication in global NPD teams effectively requires sensitivity to the uniqueness of global NPD, the capabilities of multiple types of communication mechanisms and an understanding of which of these mechanisms best meets a team's need for information. Unfortunately, understanding of these communication mechanisms, their impact and their capabilities is very limited. The research presented in this paper is an exploratory investigation into the management of communication in GNPDTs. The results of the authors' analysis revealed that differences in country culture, country of origin and geographic dispersion had an impact on the need for communicating information quickly (speed), communicating rich information and communicating different volumes of information. They found that these differences affected communication indirectly as a consequence of six factors: (1) the approach used to solve problems; (2) the means used to communicate with leaders; (3) decision-making practices; (4) different languages spoken by team members; (5) the technological capability of the member's country of origin; and (6) extreme geographical dispersion. They also found that only two of the information mechanisms which they studied were associated with performance-the use of phone calls and videoconferencing. Contrary to what might have been expected, videoconferencing was found to be negatively related to performance. The implications of this investigation for researchers and managers are discussed.

From business reengineering to business process change management: a longitudinal study of trends and practices

Abstract: Business process reengineering has been prominently discussed and implemented in a large number of firms around the world. While the notion of radical change is intuitively appealing to "fix" organizational woes, it has not always met with the degree of success originally claimed by its many proponents. This article studies the evolution of the reengineering concept and its evolution toward the broader notion of process change management. Reported here are the results of two studies that explore reengineering from a project implementation perspective and an organizational perspective at two different points in time. The results show remarkable consistency in the importance of nontechnology management issues concerning strategy, change and people. Further, the notion of continuous change seems to be becoming,more important. The study provides a foundation for identifying key variables that can be studied in order to effectively manage this multifaceted phenomenon.

Occupational cultures as a challenge to technological innovation

Abstract: This paper explains conflict over technological process innovation in cultural terms, drawing primarily on a case study of electric power distribution and strategies to automate its operation. The paper shows how different occupational cultures, "operators" and "engineers," use different mental models or cognitive representations of technology that are adaptive to their particular work contexts, but which give rise to conflicting evaluations of technological innovation. While these cultural groups may be motivated by a common interest in the successful performance of the technical system, they value different sets of criteria for system design and promising modifications. Despite the apparent contradiction, each perspective is internally consistent and rational. The paper argues that it is beneficial for management to consider these diverse perspectives carefully when planning technological innovation.

A decision analytic framework for evaluating concurrent engineering

Abstract: This paper quantifies key issues with regard to concurrent engineering through the use of risk and decision analysis techniques that enable us to better understand, structure, and manage the design process. In concurrent engineering, the information structure of a design process does not usually imply the execution patterns of the corresponding design tasks. On the contrary, this gap between the information structure and execution patterns is the essence of concurrent engineering and its basic advantage over traditional sequential design. In this paper, we relate the structure of information flow in a design process to three different execution strategies: sequential, partial overlapping, and concurrent. The risks of excessive task iterations or redesigns associated with each execution pattern are probabilistically modeled. Risk and decision analysis methodology is used to determine the best execution strategy and the optimal overlapping policy for a set of activities given their information structure. Applying this theoretical framework to a real-world design application of an automotive cylinder block suggested a potential 18% reduction in development cycle time.

A citation analysis of the technology innovation management journals

Abstract: This paper is the first citation-analysis-based follow up to the subjective survey conducted in 1993 by the Technology Innovation Management Division (TIMD) of the Academy of Management (see J. Liker, TIM Newslett., vol.7, no.2, p.5-8, 1993). That survey established a hierarchical rating of journals publishing articles in the field of technology innovation management (TIM). For each of the 1204 journals cited in the five highest ranked journals in the TIM specialty group of Liker's study (called the base journals) during the (base) period 1990-1993, a citation score is computed using three different methods: the overall score, the normalized score, and the weighted-score method. Rankings of the journals based on each of these three methods are discussed and compared one with the other. Moreover, rankings of the top journals identified by the three methods (modified to adjust for differences in sample size) were compared with Liker's survey results ranking. The key finding of the study is that, under all scoring methods, the top six spots were held by the same journals, The variation in ranks, however, became progressively greater at lower ranks. Researchers, metaresearchers, academic administrators, journal editors, and others may find the citation-based trends, ranks, and other results developed in this study helpful in stimulating further scholarly discourse in the field of TIM as it relates to the effectiveness of the journals.

A multi-attribute measure for innovation adoption: the context of imaging technology

Abstract: Despite an extensive body of research on innovation adoption, one finds many inconsistent and conflicting findings in the literature. This problem stems from the lack of a generally accepted measure of adoption. The authors' study develops a more fine-grained yet robust measure of innovation adoption, using two important attributes: radicalness and relative advantage. These measures are developed in the context of the hospital industry and validated in a study that examines the relationship between organizational climate and the adoption of imaging technology innovations in 70 hospitals.

Do rewards benefit the organization? the effects of reward types and the perceptions of diverse R&D professionals

Abstract: Previous compensation research has focused primarily on individual benefits derived from monetary rewards and has tacitly assumed that diverse organization members hold similar beliefs regarding the efficacy of specific rewards. This article compares the beliefs held by members of diverse demographic groups in R&D organizations regarding the extent to which different types of rewards produce organizational benefits. Results based on evaluations from over 1000 R&D scientists and engineers across 30 companies found that intrinsic rewards and salary increases were widely believed to provide benefits to an organization. Individual cash rewards were generally seen as providing the fewest benefits. However, members of different ethnic groups and genders held different beliefs about the utility of several rewards. The article concludes by suggesting how similarities and differences in beliefs across a diverse group of employees could affect the management of rewards in R&D settings.

An empirical evaluation of the technology cycle time indicator as a measure of the pace of technological progress in superconductor technology

Abstract: The technology cycle time indicator (TCT) is a new measure of technological progress. The TCT is the median age of the patents cited on the front page of a patent document. The measure assumes that the more recent the age of the cited patents, the more quickly one generation of inventions is replacing another. The main purpose of the study was to evaluate the TCT in a dynamic context to determine how accurately it measures the pace of technological progress. This study found the trend in TCT changed abruptly from gradually increasing (slowing in cycle time) to steadily decreasing (speeding up in cycle time) following the discovery of high-temperature superconductors. The methodology prescribed in this study could potentially be used in assessing the pace of progress for different technologies or different nations in the same technology.

Cost analysis of two-attribute warranty policies based on the product usage rate

Abstract: In the so-called two-attribute warranty policy, two types of warranty criteria, such as the age and mileage of an automobile, are employed simultaneously to determine the eligibility of a warranty claim. The authors propose in the paper several decision models that estimate the expected total cost incurred under various types of two-attribute warranty policies. They also perform a sensitivity analysis to study the effects of several model parameters, such as the discount rate, the product usage rate, and the warranty terms, on the total warranty cost.

Creativity in design: the contribution of information technology

Abstract: Efforts to improve the design process in new product development often take the form of new information technologies, and they have had varying degrees of success. This paper considers the modern technologies of design and their impact on creativity. The analysis considers such design issues as problem structure, engineering knowledge, expert systems, ideation and the social context of technologies that affect their adoption and use. There exists a general bias toward the goals of effective coordination over enhanced creativity in the systems supporting design. Suggestions for research and practice are discussed.

The computer integration of the enterprise

Abstract: Although the idea of computer integration of the enterprise has existed for a long time, still the domain is not at all well mastered. In the first part of this article, a number of definitions and specifications are proposed which are aimed at remedying this situation. A distinction is first made between enterprise integration, computer integration of the enterprise and the implementation of computer systems which contribute to the integration of the enterprise, and then between systems integration and the implementation of integrating systems. A detailed definition of integrating systems follows and the process of integration to which integrating systems give rise is explained. It is finally shown that computer integration of the enterprise is fundamentally different from organizational integration of the enterprise. The second part of the article is devoted to demonstrating the theoretical as well as the practical utility of these proposals. In particular, a case study illustrates the new way in which the computer systems in an enterprise can be viewed.

Designing risk-management strategies for critical engineering systems

Abstract: Effective management of the tradeoff between productivity and safety is a challenge in many industries that operate critical engineering systems such as nuclear power plants or offshore oil platforms. The objective of this paper is to link risk-management strategies to a system's safety and productivity over its lifetime. These strategies involve decisions that affect the physical system both directly and indirectly though the performance of the personnel that design, construct, or operate it. The problem is thus to link the different components of such risk-management strategies to human and system performance. In this paper, we present the basis of a decision support framework for the design and assessment of different risk-management strategies in risk-critical systems. First we discuss the inherent difficulty in balancing productivity and safety in the short and the long term and the different components of a risk-management strategy. We present a model involving both production failures and catastrophic failures as a function of strategic alternatives. This model is based on a probabilistic and dynamic risk analysis of a system, linking different aspects of risk-management strategies to specific characteristics of the physical system. We show how this model, coupled with explicit value judgments, can be used to design optimal strategies, e.g., to balance initial costs, long-term operations and maintenance costs, and the potential costs of catastrophic failures. To illustrate the concepts we use the case of the maintenance of a corporate airplane.

Exploring the use of design-manufacturing integration (DMI) to facilitate product development: a test of some practices

Abstract: This article reports results of a quantitative study of design-manufacturing integration (DMI) practices hypothesized to facilitate effective new product development (NPD). Results of a mail survey to manufacturing engineering managers indicate that effective NPD may best be facilitated by DMI practices such as group-based evaluation for design and manufacturing, and use of tools and techniques to transfer manufacturing information to design. However, some practices that are regularly cited as NPD facilitators in the literature (e.g., design-manufacturing rotation) are negatively and significantly related to NPD. These results may indicate that managers should be cautious when implementing DMI practices that integrate design and manufacturing directly. Results of further analysis indicate that DMI practices are significantly related to effective NPD for new products, but not for product enhancements. In addition, the DMI practices tested in this study tend to facilitate achievement of time and performance goals, but not cost and quality goals. Future research is necessary to examine the dynamics and intensity of different DMI practices with respect to different project types and goals.

Transformation of a health care information system: a self-assessment survey

Abstract: US health care providers are seeking to reduce costs while simultaneously maintaining quality of care. One strategy for the reinvention of the health care industry is the more effective use of new quality and information technology solutions. Results are presented from a survey of 98 top executives at Baylor Health Care System (BHCS), a large, multifunction health care organization in Dallas, TX. The survey sought to assess the executives' perceptions of current BHCS quality practices. The study used a survey developed for the health care industry based on the Malcom Baldrige National Quality Award (MBNQA) criteria. This paper reports findings related to the quality of BHCS internal and external data and information quality. Factor analysis and regression models using the survey data were used to highlight findings that include: (1) the need for a $50+ million information system transformation at BHCS as an essential action item to achieve the organization's critical success factors, and (2) the importance of internal and external data and information in achieving business process redesign and a quality transformation at BHCS. Results highlight the need for further research investigating the dimensions associated with the MBNQA criteria and their relationship with the information and analysis component.

Organizational management of telemedicine technology: conquering time and space boundaries in health care services

Abstract: Advanced information technology and improved information infrastructures have made telemedicine an increasingly viable health care service delivery alternative, measured in clinical, technical, and economic terms. Most existing telemedicine programs operate in an investigational setting where filtering or elimination of real-world frictions makes their migration to clinical settings challenging. The ultimate success of telemedicine demands effective technology management which can be systematically analyzed and modified to improve decision making. This paper reports research that identified important decisions that need to be made at each technology-management phase, discusses plausible decision interdependency, and highlights additional management issues that arise when telemedicine involves multiple technologies or extends across organizational boundaries. The authors' analyses of decision interdependency and intertechnology relationships, together with their managerial implications, have contributed to advancing research and practice related to management of suites of complex technologies in organizations participating in the health care service supply chain. Their findings suggest that a paradigmatic shift is needed to surmount the boundaries that have compartmentalized decision making, technology management, and organizations.

The transfer and commercialization of university-developed medical imaging technology: opportunities and problems

Abstract: The aging US population will increase the demand for cardiovascular care and thereby present opportunities for superconducting quantum interference device (SQUID) medical instruments. This paper discusses a university-based attempt to transfer and commercialize technology that potentially could eliminate the technical limitations of SQUID devices and allow their use in typical clinical environments. Based on the experiences thus far, lessons can be drawn for technology transfer of university developed medical technologies. First, universities need to re-examine the issue of the incentives to publish versus the incentives to protect intellectual property. Failure to properly align these incentives is likely to weaken or eliminate the potential for a strong intellectual property position. Second, although a number of technology-transfer strategies are potentially available to universities, three factors are critical in making this selection: (1) the strength of proprietary position; (2) the stage of development; and (3) the breadth of potential applications for the technology. Moreover, university technology-transfer offices need to take a businesslike approach in identifying appropriate technology-transfer strategies that match the technology, the marketplace, and commercialization potential. For universities seeking to commercialize medical technologies it is critical to expand collaborations with medical professionals to validate the clinical application of the technology. Finally, partnerships with medical device companies should be pursued to gain experience in product development.

Information system project-selection criteria variations within strategic classes

Abstract: Effective information system (IS) project selection is critical to the success of organizations. Researchers have proposed that selection of projects varies by strategic orientation, but none have looked at how criteria vary within strategic classes. A survey of IS professionals, with a final respondent pool of 88, is directed at exploring these differences. Paired t-tests indicate that organizations with current strategic systems rate internal factors higher than external and project-related criteria. Organizations with an expectation of future strategic information systems rate internal concerns the highest, but they also place more emphasis on external conditions than on project-related issues. The results allow an organizational comparison to common practice for the purpose of modifying project-selection techniques or benchmarking to similar organizations.

Adoption timing of new equipment with another innovation anticipated

Abstract: In dynamic environments, decisions about adopting or replacing new equipment or processes are influenced by the expectation of further innovations in technology. This paper examines the issue of the time at which an equipment (vointage one) currently in use is to be replaced with better equipment (vintage two), in the face of uncertain future availability of even better equipment (vintage three). We present an operational model useful in making adoption timing decisions and then present results that offer interesting insights into the impact of uncertainty and output expansion on the adoption time of vintage two. First, we characterize the optimal adoption time of vintage two in terms of the operating costs of various vintages, switching costs between vintages, and the hazard rate for the time of appearance of vintage three. We indicate the conditions under which it is optimal to follow a "now or never" or a "wait and adopt" policy with respect to adoption of vintage two. Second, it is shown that output expansion need not always spur the adoption of innovations. In fact, under certain conditions, output expansion may delay adoption of vintage two, even though vintage two has a higher operating cost savings per unit fixed cost than vintage three. We indicate how important factors such as benefits of new technologies other than operating cost reductions, learning effects, changes in costs over time, and fixed operating costs can be incorporated in the model.

Managing technology CAD for competitive advantage: an efficient approach for integrated circuit fabrication technology development

Abstract: This paper describes a methodology to exploit the full capabilities of technology computer-aided design (TCAD) for the development of integrated circuit fabrication processes. The development process of integrated circuits is represented by a simple model that describes the technology specifications at the beginning and the product specifications at the end of the product development cycle. Considering this model, different intermediate tasks are defined to obtain initial guess process recipe from the target product specifications. The complete technology development is shown to be achieved using TCAD in three different phases such as the generation of initial guess process recipe, the optimization of process technology, and the evaluation of process manufacturability. A simple quantitative analysis to estimate the major advantages of TCAD in reducing the cycle time and cost of technology development is presented. The technical limitations of TCAD and the measures to address these limitations are discussed. The organizational and social issues of the implementation of TCAD and the managerial responsibilities in adopting TCAD for the development of integrated-circuit fabrication process are also discussed.

Transition and change during the implementation of a computer-based manufacturing process planning system: an analysis using the equity implementation model

Abstract: Implementing changes in technologies, systems, work practices and organizational structures is vitally important for the survival of organizations in today's competitive environments. However, introducing changes in organizations is not easy. Employees often resist changes. This paper presents a case study of the implementation of a computer-based manufacturing process planning system in an automotive assembly plant. The paper employs an equity implementation model to understand resistance to the system by zone supervisors and quick acceptance by plant engineers, two major employee groups who were affected by this change. Factors affecting employee reactions to the change are identified and analyzed on the basis of the equity implementation model. The paper concludes that the equity implementation model provides a useful framework for understanding and explaining resistance and acceptance behavior of employees. The model can also be useful in assessing the job-related impacts of a system or technology implementation. The paper also discusses suggestions for implementers in developing successful change implementation strategies.

Management of health care technology literature (1979-1997): a multidimensional introspection

Abstract: This work takes an introspective look at the trends, patterns and directions taken by the researchers in the field of management of health care technology (MHT) during the period 1979-1997. A total of 333 publications are classified in six distinct categories. The major findings of this study include the following: (1) a very substantial number (55%) of researchers employed the "incremental" or ripple strategy as a primary strategy of research; (2) 69.7% of all publications were untested theory papers. While 38.1% of the publications claimed application status, only 26% were found rooted in the real world; (3) improvement in cost performance was the most pursued objective-31.5% of the publications; (4) 28.5% of the publications used application and evaluation of information systems as the dominant MHT application setting; (5) process, technology and equipment were the preferred choice of operations strategy reflected in 33.9% articles; and (6) 45.6% of all publications led the hospital system category by choosing fiscal management as their research area. The authors hope that the findings of this work will provide useful insights into the anatomy of MHT publications and motivate further research on where the field is going and what course corrections are needed, if any, beyond those that have been proposed here.

A concurrent optimization methodology for concurrent engineering

Abstract: The authors describe a methodology for making the decisions associated with the concurrent engineering of a product and its downstream held support They adopt, for the overall metrics for evaluating these decisions, long-run system availability and life-cycle cost The decisions that constitute the concurrent engineering effort can be categorized into three phases: designing the product; designing the manufacturing and logistics systems; and setting operations-control policies for parts production and field support As an enhancement to well-established methods of coordinating decision makers in concurrent engineering and sharing data across different phases of design and deployment, they have developed a methodology that simultaneously makes the decisions that constitute these phases This methodology is based on a dynamic programming model of these decisions which is robust and efficient when compared to manual methods of coordinating the concurrent engineering effort They recommend its use as a decision support mechanism, not as a substitute for interaction among design-team members

The evaluation of productive efficiency using a fuzzy mathematical programming approach: the case of the newspaper preprint insertion process

Abstract: In order to compute relative efficiency performance, numerous mathematical programming formulations usually labeled collectively as data envelopment analysis (DEA) have been proposed in the literature. These formulations assume that data can be precisely collected with respect to the resources used and the outputs produced, i.e., that the production plans are known precisely. Unfortunately, in a number of applications, measurement inaccuracies are more than prevalent. It is the primary objective of this paper to illustrate in detail the implementation of a fuzzy set-based methodology that can be used to accommodate the measurement inaccuracies associated with production plans. This approach suggests that production plans can be treated as fuzzy, i.e., that fuzzy inputs and outputs vary between risk-free and impossible bounds. These bounds represent the production extremes for each fuzzy input and output within the constraints of the underlying production technology. The approach is illustrated by analyzing the technical efficiency performance of a newspaper preprint insertion manufacturing process. It is shown that the approach identifies production plans that are very sensitive or completely insensitive to the variation of the degree of fuzziness and in turn have unique operating characteristics which when analyzed can define efficiency improvement strategies.

Participative management: an empirical study of the semiconductor manufacturing industry

Abstract: In order to stay competitive, semiconductor fabrication plants (fabs) must increase throughput and lower costs. At the same time, processes are becoming more complex with shorter life cycles. In this environment, some fabs are turning to their workforce for the added capacity, flexibility, and speed. This paper examines the effect of participative management techniques on manufacturing performance. Analyzing an international sample of 15 fabrication plants, the authors show that participative management has a statistically significant and positive correlation with manufacturing quality and a positive, but not statistically significant, correlation with quantity. The analysis also shows that the fabs in their sample tend to drive the individual components of participative management-power, information, rewards and knowledge-to the lowest level of the organization in a congruent fashion. This suggests that those fabs that utilize participative techniques do so efficiently.

Price elasticity and the growth of computer spending

Abstract: The price of computers is a key factor in explaining the growth of computer spending. However, it remains unclear whether the price elasticity of the demand for computers is constant over time. Findings on the pattern of price elasticity will have important implications in the study of information technology (IT) innovation diffusion. To test the hypothesis of dynamic price elasticity, we extend existing growth models to include a price factor with different elasticity specifications. Nested specifications of three growth models were tested using spending data from 1955 to 1984 adjusted by a quality price index for computers. The results indicate that three out of four competing models depict dynamic price elasticity over the investigated period. A similar pattern is also observed when the models are estimated using more recent data on mainframe computer spending. Our results underscore the dynamic behavior of price sensitivity in computer spending over time. They offer a new perspective to study innovation attributes and to examine their impacts empirically over time. Implications for information systems (IS) management and IT suppliers are also discussed.

Adopting a disaster-management-based contingency model to the problem of ad hoc forecasting: toward information technology-based strategies

Abstract: Ad hoc forecasts are generally unstructured forecasts that are performed infrequently. Unfortunately, there are no widely accepted formulae for performing such tasks. In this paper, the authors draw parallels between the process of ad hoc forecasting and disaster management, using characteristics of disasters to develop analogous dimensions for ad hoc forecasts, Although a given unit within an organization may not have the opportunity to repeat a particular ad hoc forecast, there are certain similarities among ad hoc forecasts performed by different units within an organization. Mapping ad hoc forecasts along the disaster characteristics brings out these similarities and allows one to identify technology-based strategies for improving ad hoc forecasts. Just as disaster planning draws together people from different units of the organization and creates a common knowledge base, they propose the creation of a common repository of ad hoc forecasts that member organizations can draw upon. This allows organizations that find themselves in need of a particular ad hoc forecast to learn from both the disaster management literature and their own experiences. The presence of the Internet and the World Wide Web provide the infrastructure for creating an inter-organizational information system.

Hedging against uncertainty in new technology development: the case of direct steelmaking

Abstract: Companies considering a major facility investment face a dilemma if a new and superior process technology may be available in the near future. Should the new technology be successfully developed, existing technology may be rendered obsolete, making the investment proposed for today a poor decision in retrospect. On the other hand, waiting for the new technology to become available may entail lost profits today as a result of inadequate capacity or poor product quality. In addition, the company could be vulnerable if the availability of the new technology is delayed or, even worse, if the development program is a failure. In this paper we show how a multiperiod stochastic programming model may be used to develop possible hedging strategies for dealing with such a situation, illustrating our ideas with a representative real-world example-direct steelmaking, For this case study, we find that planning on the basis of either scenario, success or failure, is a poor strategy compared to the available compromise solutions.