Portfolio management can be defined as a dynamic decision process in which a business list of active new products in which case it also involves research and design activities are constantly revised to keep them up to date. New projects undergo a process of constant evaluation, selection and prioritization.
In the process, the existing projects for the company can be accelerated, stopped or at time de-prioritized and the resources are allocated accordingly. These resources can also be re-allocated in order to serve the most active strategies which are likely to yield positive results for the company.
The process is usually characterized by uncertain and changing information, dynamic opportunities, strategic considerations coupled with multiple goals, continuous interdependences among the existing projects, and a number of decision makers and locations. Portfolio models are therefore an important in the decision making process.