npdsim

Simulating demand

The function demand_sim creates the demand for new products by simulating first the level and then the shape. For example,

demand1 <- demand_sim(products_number=100,
                      periods_number=20,
                      shape_number=5, 
                      shape_type="bass", 
                      level_number=20,
                      level_range=1000:10000,
                      noise_cv=0.05)

In this example, we create the demand for 100 new products over a life cycle of 20 periods where the number of shapes is 5 and the number of levels is 20. The range [1000,10000] is the range from which the level for each product is sampled. The parameter noise_cv is the coefficient of variation of the normally distributed noise applied to the generated pure demand (the pure demand is the product of the shape and level). In the example above, we take assume that the type of shapes of the 100 new products is a Bass curve where each new product has a different shape (in this case, different values for the parameters of the Bass curve are taken for each product).

Simulating level

Regarding the level, for each product, we sample the level from level_range, parameter of the function demand_sim, the default range is [1000, 10000]. The sampling is done using the function sample.

Simulating shape

npdsim first generates generic shapes, and then assign randomoly a shape to each product. The function shape_sim creates the generic shapes. For example:

shape1 <- shape_sim(periods_number=20,
                    shape_number=5,
                    shape_type="trapezoid")

head(shape1)
#>   time       shape assigned_shape
#> 1    0 0.000000000              1
#> 2    1 0.006074564              1
#> 3    2 0.012149128              1
#> 4    3 0.018223691              1
#> 5    4 0.024298255              1
#> 6    5 0.030372819              1

The previous example creates five different shapes over a time interval of 20 periods (from period 1 to period 20), where the five different shape have the same type of shape (trapezoidal). The generated shapes are:

The parameter shape_type in the function shape_sim can take the following values: “triangle”, “trapezoid”, “bass”, “random” and “intro & growth”. The type “random” picks one of the types “triangle”, “trapezoid”, “bass” randomly for each product. The type “intro & growth” is used for the shapes of the introduction and growth phases.

For example:

shape2 <- shape_sim(periods_number=20,
                    shape_number=5,
                    shape_type="random") #random is the default value

shape3 <- shape_sim(periods_number=20,
                    shape_number=5,
                    shape_type="intro & growth")

If you want to create directly one of the types “triangle”, “trapezoid”, “bass”, “random” or “intro & growth” for all the products, you can use one of the following functions shape_sim_triangle, shape_sim_trapezoid, shape_sim_bass, shape_sim_random or shape_sim_ig, respectively.

The shapes “triangle”, “trapezoid”, “bass”, “random” correspond to the shapes of product with a relatively short maturity period such as personal computers and durable products in general (we assume that products have four phases in their life cycle: introduction, growth, maturity and decline).

For products with a long maturity period, we can simulate only the demand over the introduction and growth phases (by setting shape_type=“intro & growth”).