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Topics: Marketing, Bass diffusion model, Innovation Pages: 6 (2888 words) Published: August 15, 2014
American Journal of Applied Sciences 10 (6): 536-541, 2013

ISSN: 1546-9239
©2013 Science Publication
doi:10.3844/ajassp.2013.536.541 Published Online 10 (6) 2013 (http://www.thescipub.com/ajas.toc)

NEW CAR DEMAND MODELING AND
FORECASTING USING BASS DIFFUSION MODEL
Zuhaimy Ismail and Noratikah Abu
Department of Mathematical Sciences, Faculty of Science,
Universiti Teknologi Malaysia, 81310 UTM Skudai, Johor Darul Takzim, Malaysia Received 2013-02-08, Revised 2013-02-28; Accepted 2013-06-03

ABSTRACT
Forecasting model of new product demand has been developed and applied to forecast new vehicle demand in Malaysia. Since the publication of the Bass model in 1969, innovation of new diffusion theory has sparked considerable research among marketing science scholars, operational researchers and mathematicians. The building of Bass diffusion model for forecasting new product within the Malaysian society is presented in this study. The proposed model represents the spread level of new Proton car among a given set of the society in terms of a simple mathematical function that elapsed since the introduction of the new car. With the limited amount of data available for the new car, a robust Bass model was developed to forecast the sales volume. A procedure of the proposed diffusion model was designed and the parameters were estimated. Results obtained by applying the proposed model and numerical calculation shows that the proposed diffusion model is robust and effective for forecasting demand of new Proton car. The proposed diffusion model is shown to forecast more effectively and accurately even with insufficient previous data on the new product. Keywords: Bass Diffusion Model, Forecasting, New Product, Forecast Accuracy considered. First, new product forecasting has low

credibility and low accuracy level due to the lack of or no
historical data but only based on certain assumptions.
Secondly, the time needed to develop forecast of new
product is longer because it requires more manual and
continuous attention. Lastly, data uncertainty and data
scarcity occurred when it comes to new product.
During the last few decades, many studies have been
carried out on demand forecasting but only a few has been
done on forecasting of new product demand among the
researchers. New product forecasting serves as a reality
check by providing visibility to what is likely to happen.
The new product demand forecasting is expected to be
useful for company producing new product to know better
the performance of their product and take action on any in
coincidences. In this study, we focus on new product
demand forecasting which receives less attention among
the researchers. This study is organized as follows.
Section 2 presents material and methods. The case study,

1. INTRODUCTION
Demand forecasting is an iterative process for
estimating the quantity of a product or services that the
customer will purchase or consume. Many approaches
are in demand forecasting which include the formal and
informal method of forecasting. Demand forecasting
may be used for making pricing decisions, for assessing
the future capacity requirements, or for making decisions
on whether to implement new power plant for the new
township development. It is essential for companies in
particular enable it to produce the required quantities at
the right time and arrange well in advance for the various
elements in the production processes.
Forecasting of new product demand is a process that
determines a reasonable estimate of sales attainable under
a given set of conditions. New product can mean different
things to different people. When dealing with the new
product demand, there are some problems that must be

Corresponding Author: Zuhaimy Ismail, Department of Mathematical Sciences, Faculty of Science, Universiti Teknologi Malaysia, 81310 UTM Skudai, Johor Darul Takzim, Malaysia Science Publications

536

AJAS

Zuhaimy Ismail...

References: Bass, F.M., 1969. A new product growth for model
consumer durables
Kim, D.H., Y.G. Shin, S.S. Park and D.S. Jang, 2009.
Zuhaimy Ismail and Noratikah Abu / American Journal of Applied Sciences 10 (6): 536-541, 2013
Radojicic, V
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