TOC Portfolio Selection Model for NPD projects of the biotechnological industry

Portfolio management can provide optimal investment strategies and the best allocation of scarce resources that will allow a company to make the largest profits. In Taiwan, most individual enterprises in the biotechnology industry are small and most of their limited resources are put into R&D. Therefore, picking out an effective choice of companies to include in an investment portfolio is an important issue for long-term business development. This study presents the five-step focusing procedure of the Theory of Constraints, also known as the TOC Portfolio Selection Model. This model allows a company to concentrate on the optimal allocation of constrained resources and to realize the maximum expected profits. A set of selection methods based on the key resource is established. A case study profiling the bio-chip industry is used here as an example to illustrate the TOC Portfolio Selection Model. The results indicate that the proposed method is superior to more traditional ones.