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Markov Exercise

Dress-Rite loses 10% of customers to Fashion, Inc. and 20% of market to Luxury Living each month. Fashion, Inc. loses 5% of market to Dress-Rite and 10% to Luxury Living, and Luxury Living loses 5% to each other store. Given the stores currently have equal market share, the summary asks what the market shares will be next month and in three months.

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Anna Maria Kagaoan
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997 views1 page

Markov Exercise

Dress-Rite loses 10% of customers to Fashion, Inc. and 20% of market to Luxury Living each month. Fashion, Inc. loses 5% of market to Dress-Rite and 10% to Luxury Living, and Luxury Living loses 5% to each other store. Given the stores currently have equal market share, the summary asks what the market shares will be next month and in three months.

Uploaded by

Anna Maria Kagaoan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem 15-10 Over any given month, Dress-Rite loses 10% of its customers to Fashion, Inc.

, and 20% of its market to Luxury Living. But Fashion, Inc., loses 5% of its market to Dress-Rite and 10% of its market to Luxury Living each month; and Luxury Living loses 5% of its market to Fashion, Inc., and 5% of its market to Dress-Rite. At the present time, each of these clothing stores has an equal share of the market. What do you think the market shares will be next month? What will they be in three months?

Answer: 1) Market shares next month a) State 1 = 0.264 b) State 2 = 0.33 c) State 3 = 0.396 2) Market shares in three months a) State 1 = 0.1932 b) State 2 = 0.3219 c) State 3 = 0.4749

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