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A Population-Growth Model for Multiple Generations of Technology Products

Summary: A Population-Growth Model for Multiple Generations of
Technology Products
We consider the demand for multiple successive generations of products and develop a
differential-equation-based demand model which allows demand transitions across multiple
generations. Compared to existing applications of population growth models, in which our
method is rooted, we overcome the difficulty that only sales and not the units-in-use popula-
tion of each product are observable. By replacing diffusion parameters with product-specific
causal factors, our approach minimizes the number of parameters and is able to fit the sales
data across multiple time periods and from multiple products simultaneously. We test the
performance of the model on both simulated sales data and Intel's microprocessor sales data
for the high-end gamers market.
Keywords: Multi-product Demand, Diffusion, Population Growth Model, Forecasting
1 Introduction
Marketing, producing, and delivering multiple generations of products is becoming an ever-
more challenging task for manufacturers of technology products. This paper originates from
an collaborative effort with Intel to build forecasting tools when the company periodically
introduces newer generations of products in the presence of competition. The pace of new
product introduction at Intel is driven by advances in both silicon technology and product
architecture design, also known as the "tick-tock" cadence model:
Each tick represents the silicon compaction beat rate, and each tick has a cor-


Source: Armbruster, Dieter - Department of Mathematics and Statistics, Arizona State University


Collections: Mathematics