3/15/2016

Practice Problem 2: Bass Diffusion | Week 4 Practice Problems | CTL.SC1x Courseware | edX

MITx: CTL.SC1x Supply Chain Fundamentals

Week 4: Forecasting III - Special Cases & Extensions > Week 4 Practice Problems >
Practice Problem 2: Bass Diffusion

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Week 1:
Overview of
Supply Chain
Management &
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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 in
years.

Week 2:
Forecasting I Introduction

Part 1

Week 3:
Forecasting II Exponential
Smoothing

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.)

Week 4:

Enter your answer here:

Forecasting III
- Special Cases
& Extensions
Welcome to Week
4
Lesson 1: Causal
Analysis
Lesson 2: New
Product &
Intermittent
Demand
Forecasting

Answer: 208

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.

https://courses.edx.org/courses/course-v1:MITx+CTL.SC1x_2+1T2016/courseware/71f80ac0a02747fe9cf6fcee5dd77b63/da338c912f0d4a80a7391d82ca9952b5/

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3/15/2016

Practice Problem 2: Bass Diffusion | Week 4 Practice Problems | CTL.SC1x Courseware | edX

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

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