Abstract
The Bass model is a cornerstone in diffusion theory which is used for forecasting demand of durables or new services. Three well-known estimation methods for parameters of the Bass model are Ordinary Least Square (OLS), Maximum Likelihood Estimator (MLE), Nonlinear Least Square (NLS). In this paper, a hybrid method incorporating OLS and NLS is presented and it’s performance is analyzed and compared with OLS and NLS by using simulation data and empirical data. The results show that NLS has the best performance in terms of accuracy and our hybrid method has the best performance in terms of stability. Specifically, hybrid method has better performance with less data. This result means much in practical aspect because the avaliable data is little when a diffusion model is used for forecasting demand of a new product.
| Translated title of the contribution | A Parameter Estimation of Bass Diffusion Model by the Hybrid of NLS and OLS |
|---|---|
| Original language | Korean |
| Pages (from-to) | 74-82 |
| Number of pages | 9 |
| Journal | 대한산업공학회지 |
| Volume | 37 |
| Issue number | 1 |
| DOIs | |
| State | Published - Mar 2011 |