New product forecasting of appliance and consumables : bass model

Abstract

Drinkworks is a joint venture between Anheuser-Busch and Keurig Green Mountain Inc. that has been formed to develop and launch a one-of-a-kind in-home alcohol drink system. One of the major challenges faced by Drinkworks before launching their new product was to predict its demand throughout the different stages of the product life-cycle. Being an emerging organization, Drinkworks needed a systematic demand planning tool to generate baseline strategic and operational forecasts of their new product. These baseline forecasts would be further used as a starting point for sales and operations planning, production planning and material resource planning. This thesis project focuses on selecting appropriate mathematical models to forecast demand of a new product throughout its life-cycle. This thesis concentrates on the use of Bass model to forecast the demand for Drinkworks' appliance in the initial launch phase with minimal market knowledge. Moreover, this thesis also explains the methodology to forecast pod consumption using the average consumption rate per appliance, cumulative appliances sold to the retailers, cluster analysis, and appliance forecast.