**1. Introduction**

The new product development (NPD) process belongs to crucial processes in contemporary companies, which have to compete in a saturated market and by short product life cycles. Successful implementation of NPD projects affects the company's profitability and survival. Unfortunately, many NPD projects either fail completely, miss the deadline, or exceed the budget. According to a Project Management Institute (PMI) study, some of the most common causes of project failure include changes in priorities within a company and limited resources. There are a few reasons why project duration and cost may be exceeded [1,2]: use of static and inflexible methods, use of low-end software solutions that lack features related to the entire NPD process, failure to align with the company's goals and strategies, weak executive support, and poor communication. The last three reasons depend on organizational issues, whereas the first two refer to technical support for improving project performance. The goal of this study was to design a method for supporting decision makers in searching for alternative project completion scenarios.

Currently-used software solutions dedicated to project planning provide information on the estimated cost of a project [3]. If the company's resources (e.g., financial, human) are not sufficient to develop an NPD project according to schedule, then the decision makers may be interested in obtaining information on alternative project completion variants. Additionally, they may find the estimated cost of NPD unacceptable. Current software solutions, however, fail to support project managers in reviewing the possibilities of project performance so that the preferred NPD cost is achieved given the company's resources and project requirements. The proposed approach fills in this gap and is geared towards specifying foundations for developing a decision support system dedicated to solving project prototyping problems. The aim of this paper is to elaborate an approach for planning and simulating NPD project completion, in which factors related to research and development (R&D), production, and sales promotion are involved. As the production cost usually constitutes the majority of the total cost in the process of product placement in the market, this study mainly focuses on the field of production. The proposed approach aims to identify the cost of R&D, production, and promotion at the early phase of an NPD project in order to select the most promising NPD project.

The current project planning methods represent the procedural approach, in which an NPD model is built for a specific problem, and the process of designing the model ends when the structure of the model is sufficient to solve the given problem. By contrast, in the declarative approach a single NPD model is developed, which can be used to formulate various NPD-related decision problems. A declarative representation of an NPD model allows to use effective techniques for reducing the search space of admissible solutions. This is particularly important when many decision variables with large domains have to be selected for simulations. There exist declarative simulation modeling methods that can be used to increase the efficiency of identifying alternative NPD project performance variants. By using a declarative representation of an NPD model, a decision maker can perform simulations for an entire set of admissible solutions. Consequently, the decision maker obtains more alternative NPD project performance scenarios than they would using a traditional scenario analysis, which includes the basic, optimistic, and pessimistic variants. Moreover, the decision maker may obtain variants of NPD project performance that they would never come up with themselves. This is particularly important in multi-project environments, in which resources are shared.

In this study, a project prototyping problem is formulated in terms of a constraint satisfaction problem and implemented using constraint programming techniques. This study develops previous research [4] towards using the declarative approach to search for variants of project completion within production cost constraints. The novelty of this research is twofold: (1) specifying an NPD project model and company's resources as a set of variables and constraints; (2) designing a method for solving the project prototyping method. The proposed method uses parametric estimation to identify complex relationships among data, and constraint programming to effectively search for possible solutions. Consequently, the proposed approach is more adaptable to new conditions related to project performance than other currently used methods.

The paper is organized as follows: Section 2 provides a literature review on new product development, cost estimation techniques and constraint programming. In Section 3 a prototyping problem of product development is formulated as a constraint satisfaction problem (CSP). A method for searching variants that meet the desirable production cost is presented in Section 4. An illustrative example of the proposed approach is presented in Section 5. Finally, a conclusion is drawn and directions of future research are indicated in Section 6.

### **2. Literature Review**
