Question

Problem 16-09 (Algorithmic) The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities: To From MDA Special B 0.80 0.25 Special B MDA 0.20 0.75 a. Which brand appears to have the most loyal customers? Special B Explain. The input in the box below will not be graded, but may be reviewed and considered by your instructor. b. What are the projected market shares for the two brands? If required, round your answer to three decimal places. T1 = 0.05 х 7T2 = 0.556 X

Answer 1

Answer:--- Date:---31/7/2020 Special B has more loyal customers in that the transition probability from Special B to Special B is more than that from MDA to MDA Total Market Share of Special B and MDA is always equal to 1 nl + 12 = ---> 1 Share of Special Bil) = t1 = 0.80n1 + 0.2572 0.2011 -0.2512 = 0 ----> 2 Share of MDA(112) = 12 = 0.2011 + 0.7572 -0.2011 + 0.2512 = 0 ---->3 Solve 1 and 2 we get 12 = 1/2.25 = 0.444 al = 1-0.444 = 0.556

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