Incorporating Dynamic Potential market in Innovation Diffusion Model Using Stochastic Differential Equation

chaudhary, Kuldeep; Mehta, Sunita; Kumar, Pradeep

doi:10.46254/AN09.20190480

Operations Research

Incorporating Dynamic Potential market in Innovation Diffusion Model Using Stochastic Differential Equation

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Kuldeep chaudhary Department of Applied Mathematics, Amity University

Sunita Mehta Department of Applied Mathematics, Amity Institute of Applied Sciences Amity University

Pradeep Kumar Amity University

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In this paper, we incorporate the idea of uncertainty in adoption process in innovation diffusion model in dynamic market. The diffusion process is sum of a deterministic component that is a function of cumulative adopters and a random fluctuation with intensity proportional to the cumulative adopters. The state of the system is modeled as a stochastic process which is governed by stochastic differential equation. Its applicability and accuracy of model is illustrated by means of new product sales data. Predictive validity and mean square error have been used to check the validity of the proposed model.

Published in 9th Annual International Conference on Industrial Engineering and Operations Management, Bangkok, Thailand

Publisher IEOM Society International

Date of Conferences March 5–7, 2019

ISBN 978-1-5323-5948-4

ISSN/E-ISSN 2169-8767

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Incorporating Dynamic Potential market in Innovation Diffusion Model Using Stochastic Differential Equation