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Practice Problem 2: Bass Diffusion

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PRACTICE PROBLEM 2: BASS DIFFUSION

An MIT student from India has invented a Chai-making machine for use in

restaurants and offices across the United States. Since she knows you are

taking SC1x, she has asked for your help in projecting the adoption that

this new appliance could have over the following decade. Her best

estimate of the potential market for the Chai machine is a quarter of a

million units sold. Using as reference the values of p and q for

coffeemakers and microwaves, you have estimated that the Chai-making

machine could have a p=0.02 and a q=0.5 with the unit of time t given inyears.

Part 1

Assuming that the machines have a long life and that each adopter only

buys one machine, use the Bass diffusion model to estimate how many

thousands of units can she expect to have sold by the end of a decade.(Give your answer in thousands: e.g. enter 50 for 50,000 units sold.)

Enter your answer here:

    Answer: 208

 

Course

Overview &Logistics

Entrance

Survey

Week 1:

Overview of 

Supply Chain

Management &

Logistics

Week 2:

Forecasting I -

Introduction

Week 3:

Forecasting II -

Exponential

Smoothing

Week 4:

Forecasting III

- Special Cases

& Extensions

Welcome to Week

4

Lesson 1: Causal

Analysis

Lesson 2: New

Product &

Intermittent

Demand

Forecasting

EXPLANATION

Using the values of p=.02, q=.5 and M=250 (thousand), and the Bass

diffusion model, we can calculate the number of units sold N(t) after

10 time units (a decade). The solution is shown below.

MITx: CTL.SC1x Supply Chain Fundamentals

https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/341f21c75c0049fd9c78321d8e30162a/https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/fa222dbaed9c42298d69bb46cb758ab8/https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/20715ed76fe54088bc11efbf0a555166/https://www.edx.org/https://www.edx.org/https://www.edx.org/https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/341f21c75c0049fd9c78321d8e30162a/https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/fa222dbaed9c42298d69bb46cb758ab8/https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/20715ed76fe54088bc11efbf0a555166/

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Week 4 Practice

Problems

Supplemental

Materials for

MicroMasters

Week 4 Graded

Assignment

Homework due Mar

16, 2016 at 15:00 UTC

Week 5:

Inventory

Management I

- Deterministic

Demand

The solution can be downloaded here:

- For Excel

- For LibreOffice

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