Today, businesses operate in an interconnected global economy, in which innovation happens on a moment to moment basis. Statistical predictive... Show moreToday, businesses operate in an interconnected global economy, in which innovation happens on a moment to moment basis. Statistical predictive modeling in marketing and development is emerging as a crucial component to the success of small companies and large corporations alike. The goal of this paper is to analyze the Bass model as it pertains to sales of the Chevy Volt. The Bass model has been shown to be a useful tool for forecasting the sales of new products as they become available in the marketplace, but what are the model's limitations? The widely studied Bass model produces computational problems when we evaluate the model for a larger set data which extends to modified models constructed from the original Bass model. Kijek in [14] and Srinivasan and Mason in [16] alert us of the shortcomings of the Maximum Likelihood approach of solving the Bass model which extends to solving the Generalized Bass model, but these authors limit us to a vague listing without a close analysis. In this paper we present the issues of estimating the Bass model parameters when using the Maximum Likelihood approach. Furthermore, we introduce an improved generalized model which takes into account the shortcomings of the Bass model and our proposed approach of overcoming these. We will illustrate the limitations of the Bass model when using a large data set from the Chevy Volt car data published by Inside EVs[12]. Careful analysis of the Bass model and its current modifications provides a rich tool that has potential in changing the future of a company when introducing new products to the market. M.S. in Applied Mathematics, May 2017 Show less
