The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities. To From Special B MDA Special B 0.90 0.10 MDA 0.02 0.98 (a)Which brand appears to have the most loyal customers? Explain. MDA has the most loyal

The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities. To From Special B MDA Special B 0.90 0.10 MDA 0.02 0.98 (a)Which brand appears to have the most loyal customers? Explain. MDA has the most loyal

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Concept explainers

Purchase Process

Purchasing refers to the act of procurement of products or services from a market of resources. The procedures used to accomplish the acquisition of the requisite resources are referred to as the purchasing process. Consumer behavior, customer strategy, product pricing, consumer necessity, and other variables are various parts of the process.

Question

The purchase patterns for two brands of toothpaste can be expressed as a Markov process with the following transition probabilities.

From	Special B	MDA
	To
Special B	0.90	0.10
MDA	0.02	0.98

(a)Which brand appears to have the most loyal customers? Explain.

MDA has the most loyal customers because ( ) %? stay with them and only ( ) %? switch to the other brand, as opposed to Special B where only ( )%? stay with them and ( )%? switch.

(b)

What are the projected market shares for the two brands? (Enter exact numbers as integers, fractions, or decimals.)

Special B?₁=?

MDA?₂=?

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