Resource Allocation in an R&D Department

9.8. Conluding Comments

We have presented a model for evaluating budget shifts among a set of programs or research areas, where the impact data are ordinal. Such data is typical of this environment insofar as impacts on broad general research initiatives are difficult to quantify. In the process of making budget shifts among research areas, there are implied impacts on the sizes of the budgets held by the departments. If, for example, a department derives its entire budget as a result of research carried out in one area, then losses or gains in that area may have immediate severe consequences vis-a-vis that funding. On the other hand, if a department carries out research in a number of areas, some of which are down graded (budgets reduced) while others are upgraded, there may be no effect on that department’s funding at all.

It may be possible to minimize budget change impacts at the department level (either by budget increases that can cause staff shortages, or decreases that may lead to staff layoffs) using a goal programming approach. Possible goals may be (a) to retain department budgets at current levels, (b) avoid layoffs in departments where staff may need to interact with other departments, (c) avoid increased staff needs of a type that is difficult to acquire, and so on. While these department-level impacts have not been addressed here, they are by no means trivial considerations. They are, however, a second level issue worthy of later study.