Graded Exercise: Bass Model (10 points)

1) Bass Model:

You are required to forecast the sales pattern of a new product X that is still at a
very early stage in the development process. Researching the sales pattern of an
analogous product, you find that one similar product in the past had the following
sales pattern since its launch in the market:
(in 000)
Time period Sales

1 160
2 425
3 1234
4 1646
5 555
6 78
7 9

Your market research suggests that the maximum sales potential for your product
is 16,000 units (in 000’s). You have strong reasons to believe that the diffusion of
your product will be similar to this past product with the sales data provided
above.

Estimate and plot the diffusion pattern of your new product (please show and
explain all the details).

NOTE: Please submit your answers to the TA.