Research on Product Portfolio Decision-making Model

With the development of the mechanization and automation, the defects of the traditional decision-making model of product portfolio emerge increasingly. At the same time, the extreme assumptions of Activity-based Costing and Theory of Constraints which are using now make the result of decision making become distortional. And some linear programming models based on these theories do not consider product market opportunity synthetically yet. To make up the defects of lacking considering the market competitiveness and to make the decision-making model become more rational and practical, the enterprises need to consider the product acceptance in market and the processing cost of the unacceptable product synthetically when they make the decision of the best product portfolio. The optimization model this paper proposes should be more valid and feasible for enterprise decision-making of product portfolio in strong market competition.