Assignment 4 - MODIFYING THE DIFFUSION MODEL

Start with the basic Bass Diffusion Model discussed in class. You are going to modify the existing model

1. Open the model and save the model as a new file Lastname_Assign4.MDL
2. Label the simulation run GENERIC and run the model simulation before you make any changes to it.
3. Modify the model as necessary so that it reflects the correct variables and assumptions to apply this model to the Smartphone industry. Make sure that your model variables and equations match the answers you provide in the questions.
4. After you have made all needed changes, name the simulation run SMARTPHONE.
5. Run the simulation.

In WORD document, answer the following questions:

1. What would be a reasonable Average Product Life (APL) for the Smartphone industry?
2. Why did you choose that APL?
3. What happens when the APL is changed?
4. What is the Equation and Unit for Discard Rate in your modified model?
5. Go to Dataset and click Charts. Create a graph showing Potential Adopters and Adopters and paste it in your document.
6. Create another graph showing Adoption Rate and Discard Rate on one chart. Paste it in document.
7. Give one example of a product where this model structure might apply (other than smartphone).

Adopters Potential Adopters Adoption Rote AR Market Saturation Adoption from Advertising Market Saturation Advertising Effectiveness Word of Mouth Adoption from Word of Mouth Total Population N Adoption Fraction Contact Rate Adopters Potential Adopters Adoption Rote AR Market Saturation Adoption from Advertising Market Saturation Advertising Effectiveness Word of Mouth Adoption from Word of Mouth Total Population N Adoption Fraction Contact Rate