SOLUTION :

A. Potential Demand using Top-Down Approach:

Assumptions:

Total urban households: 20 crore

Market penetration rate: This refers to the percentage of households that are expected to adopt the sterilization box within a
Replacement cycle: This is the average time period after which a household may replace their sterilization box.
Adoption rate: This is the rate at which new households adopt the product each year.
Price sensitivity: This refers to how sensitive households are to changes in the price of the sterilization box.

Quantitative Metrics:

Market Penetration Rate: Let's assume an initial market penetration rate of 5% in the first year, with an optimistic scenario of
Replacement Cycle: Assume an average replacement cycle of 5 years.
Adoption Rate: For the adoption rate, let's assume a constant rate of 20% of non-adopting households adopting the product e
Price Sensitivity: Given that the price point considered for the product is Rs 7,500 per unit, we can assess the price sensitivity b

Optimistic Scenario:

Market Penetration Rate: 10%

Replacement Cycle: 5 years
Adoption Rate: 20% per year
Price Sensitivity: Low
Potential Demand = 20 crore * 10% * (1 - (1 - 0.20)^5) = 1 crore units

Pessimistic Scenario:

Market Penetration Rate: 2%

Replacement Cycle: 5 years
Adoption Rate: 20% per year
Price Sensitivity: High
Potential Demand = 20 crore * 2% * (1 - (1 - 0.20)^5) = 0.4 crore units

B. Products Considered for Innovation and Adoption Coefficients:

For deriving the values of innovation and adoption coefficients (p and q), products considered should be those that have unde

C. Sales Forecasts for the First Five Years:

Given:
p (innovation coefficient) = 0.009
q (imitation coefficient) = 0.542

Using the Bass Model formula:

F(t)=p+(q×∫0tF(u)du)
​

F(t)
0.009is the cumulative number of adopters at time t.
F(1)=0.009+(0.542×0)=0.009
0.0148
F(2)=0.009+(0.542×0.009)=0.0148
Year 3: (3)=0.009+(0.542×0.0148)=0.0178F(3)=0.009+(0.542×0.0148)=0.0178
Year 4: (4)=0.009+(0.542×0.0178)=0.0192F(4)=0.009+(0.542×0.0178)=0.0192
Year 5: (5)=0.009+(0.542×0.0192)=0.0203F(5)=0.009+(0.542×0.0192)=0.0203
Sales forecasts for the first five years are approximately 0.009, 0.0148, 0.0178, 0.0192, and 0.0203, respectively.
and adoption patterns
There should not any correlation between acf and pacf model for the best fit arima model