A decision support framework for robust R&D budget allocation using machine learning and optimization

Published on Jun 1, 2019
· DOI :10.1016/j.dss.2019.03.010
Hoon Jang6
Estimated H-index: 6
(Science and Technology Policy Institute)
Abstract Considering that government funding agencies make decisions on research and development (R&D) budget allocation to support an increasing number of research proposals, effective decision support systems are necessarily required. Motivated by the efforts of the Korean government, we propose a new decision support framework for allocating an R&D budget such that it maximizes the total expected R&D output. The proposed framework incorporates an R&D output prediction model with an optimization technique. We first employ a machine learning algorithm to accurately estimate future R&D output. Then, we apply a robust optimization technique to hedge against uncertainty in the predicted R&D output values. If not properly accounted for, this uncertainty may yield an inefficient budget allocation plan, thus hindering the operation of the R&D budgeting system. We demonstrate the effectiveness of the proposed model by applying it to a national R&D program conducted by the Korean government. Specifically, using the same budget, our budget allocation plan can achieve an output 13.6% greater than the actual R&D output. Thus, our model helps to attain allocation efficiency by systematically allocating budgets. We also observe the price of robustness when our model conservatively allocates budgets in order to hedge against uncertainty in the R&D predictions. Our findings offer insights for both policymakers and researchers related to designing better budget allocation systems for national R&D programs.
  • References (54)
  • Citations (3)
📖 Papers frequently viewed together
72 Citations
78% of Scinapse members use related papers. After signing in, all features are FREE.
#1Kannan Govindan (University of Southern Denmark)H-Index: 65
#2Mohammad Fattahi (University of Shahrood)H-Index: 12
Last. Esmaeil Keyvanshokooh (UM: University of Michigan)H-Index: 6
view all 3 authors...
Abstract Supply chain network design (SCND) is one of the most crucial planning problems in supply chain management (SCM). Nowadays, design decisions should be viable enough to function well under complex and uncertain business environments for many years or decades. Therefore, it is essential to make these decisions in the presence of uncertainty, as over the last two decades, a large number of relevant publications have emphasized its importance. The aim of this paper is to provide a comprehen...
103 CitationsSource
#1Jian Wang (Katholieke Universiteit Leuven)H-Index: 14
#2Reinhilde Veugelers (Bruegel)H-Index: 39
Last. Paula E. Stephan (GSU: Georgia State University)H-Index: 37
view all 3 authors...
Research which explores unchartered waters has a high potential for major impact but also carries a high uncertainty of having minimal impact. Such explorative research is often described as taking a novel approach. This study examines the complex relationship between pursuing a novel approach and impact. We measure novelty by examining the extent to which a published paper makes first time ever combinations of referenced journals, taking into account the difficulty of making such combinations. ...
54 CitationsSource
#1Fang Liu (Zhejiang University of Finance and Economics)H-Index: 5
#2Wei-Dong Zhu (Hefei University of Technology)H-Index: 2
Last. Jian-Bo Yang (University of Manchester)H-Index: 54
view all 5 authors...
As a typical multi-criteria group decision making (MCGDM) problem, research and development (R&D) project selection involves multiple decision criteria which are formulated by different frames of discernment, and multiple experts who are associated with different weights and reliabilities. The evidential reasoning (ER) rule is a rational and rigorous approach to deal with such MCGDM problems and can generate comprehensive distributed evaluation outcomes for each R&D project. In this paper, an ER...
5 CitationsSource
#1Kevin J. Boudreau (Harvard University)H-Index: 15
#2Eva C. Guinan (Harvard University)H-Index: 44
Last. Christoph Riedl (NU: Northeastern University)H-Index: 18
view all 4 authors...
Selecting among alternative projects is a core management task in all innovating organizations. In this paper, we focus on the evaluation of frontier scientific research projects. We argue that the "intellectual distance" between the knowledge embodied in research proposals and an evaluator's own expertise systematically relates to the evaluations given. To estimate relationships, we designed and executed a grant proposal process at a leading research university in which we randomized the assign...
61 CitationsSource
#3Satu Elisa Schaeffer (Universidad Autónoma de Nuevo León)H-Index: 10
#4Laura Cruz-ReyesH-Index: 9
The problem of static research and development (R&D) project portfolio selection arises when a public organization opens a call for proposals and then builds a portfolio choosing which ones to fund in terms of impact measures including social objectives, emphasis areas, geographical influence, and other non-monetary factors. The funds are classified into types of expenses, depending on the goals and preferences of the organization: equipment purchases, travel expenses, scholarships, publication ...
16 CitationsSource
#1A. L. SoysterH-Index: 1
This note formulates a convex mathematical programming problem in which the usual definition of the feasible region is replaced by a significantly different strategy. Instead of specifying the feasible region by a set of convex inequalities,fi(x)_ bi, i=1, 2, , m, the feasible region is defined via set containment. Here n convex activity sets {Kj, j=1, 2, * * *, n} and a convex resource set K are specified and the feasible region is given by
365 Citations
#1Stelios D. Bekiros (EUI: European University Institute)H-Index: 22
#2Jose Arreola Hernandez (ECU: Edith Cowan University)H-Index: 6
Last. Duc Khuong NguyenH-Index: 39
view all 4 authors...
This study proposes an integrated framework to model and estimate relatively large dependence matrices using pair vine copulas and minimum risk optimal portfolios with respect to five risk measures within the context of the global financial crisis. We apply this methodology to two 20-asset mining (gold and iron ore-nickel) sector portfolios from the Australian Securities Exchange. The pair vine copulas prove to be powerful tools for the modeling of changing dependence risk under three different ...
20 CitationsSource
#1Francesco Costantino (Sapienza University of Rome)H-Index: 16
#2Giulio Di Gravio (Sapienza University of Rome)H-Index: 16
Last. Fabio Nonino (Sapienza University of Rome)H-Index: 16
view all 3 authors...
Abstract While a growing body of literature focuses in detecting and analyzing the main reasons affecting project success, the use of these results in project portfolio management is still under investigation. Project critical success factors (CSFs) can serve as the fundamental criteria to prevent possible causes of failures with an effective project selection process, taking into account company strategic objectives, project manager’s experience and the competitive environment. This research pr...
39 CitationsSource
#1Pekka MildH-Index: 6
#2Juuso Liesiö (Aalto University)H-Index: 13
Last. Ahti Salo (Aalto University)H-Index: 33
view all 3 authors...
Project portfolios for the annual maintenance of infrastructure assets may contain dozens of projects which are selected out of hundreds of candidate projects. In the selection of these projects, it is necessary to account for multiple evaluation criteria, project interdependencies, and uncertainties about project performance as well as financial and other relevant constraints. In this paper, we report how Robust Portfolio Modeling (RPM) has been used repeatedly at the Finnish Transport Agency (...
18 CitationsSource
#1Hyunwoo Park (Georgia Institute of Technology)H-Index: 10
#2Jeongsik Lee (Drexel University)H-Index: 8
Last. Byung-Cheol Kim (Georgia Institute of Technology)H-Index: 7
view all 3 authors...
Using a natural experiment in research funding by the National Institutes of Health (NIH) following the American Recovery and Reinvestment Act (ARRA) of 2009, we study the NIH's revealed preference in project selection. We do so by comparing the characteristics of the projects additionally selected for funding due to an unexpected increase in resources under the ARRA with those supported through regular NIH budget. We find that the regular-funded projects are on average of higher quality, as mea...
8 CitationsSource
Cited By3
#1Zhengtang Fu (BIT: Beijing Institute of Technology)
#2Peiwu Dong (BIT: Beijing Institute of Technology)H-Index: 1
Last. Yanbing Ju (BIT: Beijing Institute of Technology)H-Index: 9
view all 3 authors...
Abstract With the concerns of environment protection, electric vehicle (EV) is regarded as a promising transportation tool for green cities project. Since the amount of EV is rising shapely, the EV charging demands is also rapidly generated. However, seeking suitable charging facilities is not easy for EV users, new energy companies run charging station separately for self-interests, and charging pile information is not transparent for drivers. This dilemma is not solved until the merging of blo...
#1William N. Caballero (AFIT: Air Force Institute of Technology)H-Index: 1
#2Brian J. Lunday (AFIT: Air Force Institute of Technology)H-Index: 9
Abstract An entity often seeks to influence the decisions of others in a system. This dynamic is apparent in a variety of settings including criminal justice, environmental regulation, and marketing applications. However, the central task of the influencing entity is confounded by uncertainty regarding their understanding of the structure and/or parameters of the decisions being made. The research herein sets forth a decision support methodology to identify robust influence strategies under such...
#1Daekook KangH-Index: 5
#2Wooseok JangH-Index: 4
Last. Jeonghwan JeonH-Index: 1
view all 4 authors...
As the Korean government expands the budget for national research and development, the need for an institute that deliberates, coordinates, and operates research development and its budget has increased. In response to these demands, the National Science and Technology Council (NSTC) was recently established. However, to achieve a creative economy, which is the economic system where value is based on novel imaginative qualities rather than the traditional resources of land, labor, and capital, m...
1 CitationsSource
#1Mathias Kraus (ETH Zurich)H-Index: 5
#2Stefan Feuerriegel (ETH Zurich)H-Index: 16
Abstract Predicting the remaining useful life of machinery, infrastructure, or other equipment can facilitate preemptive maintenance decisions, whereby a failure is prevented through timely repair or replacement. This allows for a better decision support by considering the anticipated time-to-failure and thus promises to reduce costs. Here a common baseline may be derived by fitting a probability density function to past lifetimes and then utilizing the (conditional) expected remaining useful li...
7 CitationsSource