Bass Diffusion Model

AnyLogic supports different modeling techniques. This document covers System Dynamics modeling approach. There are many spheres where system dynamics simulation can be successfully applied—the range of SD applications includes business, urban, social, ecological types of systems. AnyLogic allows you to create complex dynamic models using standard SD graphical notation.

This tutorial will briefly take you through the process of constructing a simulation model using AnyLogic. It is intended to introduce you to AnyLogic interface and many of its main features. We will create a simple illustrative example—the product life cycle model, used for forecasting sales of new products.

The first 10 steps will take you through the process of construction of the classic Bass diffusion model. The model describes a product diffusion process. Potential adopters of a product are influenced into buying the product by advertising and by word of mouth from adopters – those who have already purchased the new product. Adoption of a new product driven by word of mouth is likewise an epidemic. Potential adopters come into contact with adopters through social interactions. A fraction of these contacts results in the purchase of the new product. The advertising causes a constant fraction of the potential adopter population to adopt each time period.

Then we will expand our model by considering some details and introducing you to some advanced features of AnyLogic useful in creating system dynamics models. The expanded model may help you to better plan the entry strategy, target the right consumer and anticipate demand so as to have an efficient and effective promotion strategy.

Note that there are several reference files available for this model representing the milestones of the editing. You can use reference files if you experience any difficulties creating a model and you would like to compare your model with the reference file. You can use Welcome Page to open those examples. Welcome Page appears automatically when you open AnyLogic. It can be also opened whenever you like from AnyLogic menu: Help > Welcome.

        Step 0. Analyzing the model