A Product Development Project is considered to have failed when it achieves a success rating of less than 90% (see Product Development Project Results). A failed project should not be used to either modify an existing product or launch a new product. You will need to create a new project.
The most common reason a project fails is the budgeted expenditure was too low.
How do I calculate the budgeted expenditure required for my development project?
The cost to achieve your targeted product specifications is calculated using the change in tooling from your closest previously completed project.
To calculate this:
1. Use the Product Development Project Results report to find an existing project with the closest desired specifications to your new project.
2. Once you have found this, calculate the difference in specifications between this and your desired new project.
For example, if you wanted to develop a new Leisure project with specs of Style: 50 Technical: 10
And your existing project was an Adventurer project had Style: 50 Technical: 60
The difference would be:
3. Finally, calculate the required expenditure using the formula as stated on the Development Information report:
Cost per new Style specification = $1,000
Cost per new Technical specification = $20,000
So for our example above:
(0 x $1000) + (50 x $20,000)
= Expenditure required of $1m