Analysis of Production Capacity and Sampling of Primary and Contingent Products

  • Tingting Qu
  • Yujie Zhong
  • Zhineng Hu
Conference paper
Part of the Lecture Notes in Electrical Engineering book series (LNEE, volume 185)


This paper establishes a model group of diffusion process of primary and contingent products, and explores the impact of free samples on diffusion process considering repeat purchase, multiple-unit purchase and various pricing strategies under supply restrictions. The paper shows that a proper production capacity to meet the market can be determined by balancing the production capacity and cost. When the production capacity is big enough, there is no need to set up the preparatory period to produce products. When the production capacity is too small to meet the demand, there is no need to sampling; only when the production capacity reaches a certain extent, the sampling level keeps in a stable level.


Primary product Contingent product Product sampling Production capacity Price strategy 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.



This research is supported by National Natural Science Foundation of China (Grant No. 70971091).


  1. 1.
    Bass M (1969) A new product growth model for consumer durables. Management Science 15:215–227.Google Scholar
  2. 2.
    Peterson A, Mahajan V (1978) Multi-product growth models. In: Shedth J (ed.) Research in Marketing. JAI Press, Greenwitch.Google Scholar
  3. 3.
    Jain D, Mahajan V, Muller E (1991) Innovation diffusion in the presence of supply restrictions. Marketing Science 83–90.Google Scholar
  4. 4.
    Jain D, Mahajan V, Muller E (1995) An approach for determining optimal product sampling for the diffusion of a new product. Journal of Production Innovation Management 12:124–135.Google Scholar
  5. 5.
    Kurawarwala A, Matsuo H (1996) Forecasting and inventory management of short life-cycle products. Operations Research 1:131–150.Google Scholar
  6. 6.
    Kumar S, Swaminathan J (2003) Diffusion of innovations under supply constraints. Operations Research 11:866-879.Google Scholar
  7. 7.
    Ho H, Savin S, Terwiesch C (2002) Managing demand and sales dynamics in new peoduct diffusion under supply constraint. Managing Science 2:187–206.Google Scholar
  8. 8.
    Mesak I (1996) Incorporating price, advertising and distribution in diffusion models of innovation: Some theoretical and empirical results. Computers Oprations Research 23:1007–1023.Google Scholar
  9. 9.
    Parker P (1992) Price elasticity dynamics over the adoption life cycle. Journal of Marketing Research 24:358–367 69 Analysis of Production Capacity and Sampling 817.Google Scholar
  10. 10.
    Meade N, Islam T (2010) Using copulas to model repeat purchase behaviour-an exploratory analysis via a case study. Europran Journal of Poerational Research 200:1007–1023.Google Scholar
  11. 11.
    Jain D, Rao R (1990) Effect of price on the demand for durables: Modeling, estimation and findings. Journal of Business and Economic Statistics 8:163–170.Google Scholar
  12. 12.
    Horsky D (1990) A diffusion model incorporating product benefits, price, income, and information. Marketing Science 9:342–365.Google Scholar
  13. 13.
    Maier F (1998) New product diffusion models in innovation management — A system dynamics perspective. System Dynamics Review 14:285–308.Google Scholar
  14. 14.
    Steffens P (2003) A model of multiple-unit ownership as a diffusion process. Technological Forecasting and Social Change 70:901–917.Google Scholar

Copyright information

© Springer-Verlag London 2013

Authors and Affiliations

  1. 1.Uncertainty Decision-Making LaboratorySichuan UniversityChengduPeople’s Republic of China

Personalised recommendations