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ASSIGNMENT. ISEN4821. S-Curve for forecasting.

The XYZ company introduced the new technology (currently advertised as U-

VERSE) in mid- 2010. At the time, the company estimated that their new

technology will have a long-term market share of 70% (i.e. M=70%).

According to the company’s records, by January 1st, 2011, its market share

had reached 5% of its peak, and it reached to 45% of its peak by April first

2013. The company’s long-term technology plan calls for starting R&D

activities for new technology 2 years before the current technology reaches

its peak (or within 1% of its peak).

PART I: Determine

1)- The calendar year (call this X) the company’s market share will reach its

expected peak, and the year R&D activities for the next technology

should start

2)- Use a time unit of 1 quarter (0.25 year), calculate the market share for

each period, from 2013 to year X+2, and graph the corresponding S-



When the technology was introduced, using historical data for similar

products, it was determined that:

A)- Demand for the product in year T will increase for some time in the

future and could be estimated using the following equation.

Yearly demand in million units, D(t) = 0.85*(T-2010) 2


B)-The company will realize a long-term average revenue of $120 per unit.

C)- Total Cost of R&D activities, promoting the technology, introduction and

other expenses, will be decided from the following equation Total costs in million-dollar, TC = 180+50*(T-2010.5) +0.8

Using the information provided, determine

1)- How long will it take the company to recover its investment and start

generating profit. (This is called Break-Even -Point)

2)- Suppose at the end of year 2017, the company sales the technology for

$400 Mil. to a competitor, Generate profit or loss for the company from

the year 2013 to the end of 2017. What was the net financial outcome of

the technology?

Assignment help: General methodology

In this type of forecasting assignment, you need to proceed as follows

1)- determine α and To from the data for initial n quarts provided. Note that unit of time is always a quarte

2)- start spreadsheet with first column as the time. Start this column with first

quarter you have data for or To, whichever is smaller

3)- In the next column generate the market share using the equation 1 (see the

tutorial on S-curve Forecasting)

4)- in the next few columns generate D(t) and TC based on column 1 data.

5) For each quarter (or t value):

Revenue= (Market share) x (Total demand) x (price per unit)

Total cost. Calculated from TC equation

Profit = Revenue -cost

Others: Need to extract from the output data

Note: When the calculated market share gets close to M, the output will get

closer to M (in very small increments) but will never assume a value =M. So

as soon as the calculated market shar get within 0.25 points of M, you should

stop the simulation.