Adoption of a new product driven by word of mouth is likewise an epidemic.

Potential customers of a product are influenced into buying the product by advertising and by word of mouth from customers – those who have already purchased the new product. The model describes a product diffusion process. The Product Life Cycle Model We will create the product life cycle model. © 1992-2004 XJ Technologies 1 AnyLogic V System Dynamics Tutorial 1. Start Page will appear automatically once you close the model you are editing. You can use the Start Page to open those examples. 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. Note that there are several reference files available for this model representing the milestones of the editing. Then we will expand our model by considering some details and introducing you to some advanced features of AnyLogic. In the first chapter we will construct the classic Bass diffusion model. We will create a simple illustrative example-the product life cycle model, used for forecasting sales of new products. It is intended to introduce you to AnyLogic interface and many of its main features. This tutorial will briefly take you through the process of constructing a simulation model using AnyLogic. AnyLogic allows you to create complex dynamic models using standard SD graphical notation. 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. This document covers System Dynamics modeling approach. 54 iv © 1992-2004 XJ Technologies AnyLogic V System Dynamics Tutorial About this Tutorial AnyLogic V supports different modeling techniques. 40 2.3 MODELING A PROMOTION STRATEGY.43 2.3.1 Modeling advertising expenditures.43 2.3.2 Modeling a promotion plan.45 2.4 OPTIMIZING THE PRODUCT LAUNCH STRATEGY.48 2.4.1 Checking the market saturation.48 2.4.2 Configuring optimization.50 2.4.3 Running optimization.52 3. 38 2.2.2 Formulating the adoption fraction. 33 © 1992-2004 XJ Technologies iii AnyLogic V System Dynamics Tutorial 2.1 ADDING REPLACEMENT PURCHASES LOGIC.33 2.1.1 Modeling the product discard rate.33 2.1.2 Modifying the animation.36 2.2 MODELING THE DEMAND CYCLE.38 2.2.1 Adding experimental data to model. 23 1.15.2 Creating animated stock and flow diagram.24 1.15.3 Adding controls.30 2. 19 1.14.2 Examining the adoption rate.21 1.14.3 Viewing the contribution of different adoption sources. 14 1.11 CONFIGURING SIMULATION.16 1.12 RUNNING THE MODEL.18 1.13 VIEWING THE VALUES OF VARIABLES.18 1.14 DISPLAYING VARIABLE CHANGES WITH CHARTS.19 1.14.1 Viewing customer and potential customer populations dynamics. 12 1.9 DEFINING THE ADOPTION RATE FORMULA. 7 1.5 DEFINING ADOPTION FLOW INFLUENCE ON POPULATIONS. 3 1.3 MODELING CUSTOMER AND POTENTIAL CUSTOMER POPULATIONS AS STOCKS. THE PRODUCT LIFE CYCLE MODEL.2 1.1 CREATING A NEW PROJECT. XJ Technologies Company Ltd ii © 1992-2004 XJ Technologies AnyLogic V System Dynamics Tutorial Contents ABOUT THIS TUTORIAL. AnyLogic V System Dynamics Tutorial Copyright © 1992-2004 XJ Technologies. AnyLogic V System Dynamics Tutorial © 1992-2004 XJ Technologies Company Ltd.

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