2. The leading brewery on the West Coast (labeled A) has hired an OR analyst to analyze its market position. It is parti

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2 The Leading Brewery On The West Coast Labeled A Has Hired An Or Analyst To Analyze Its Market Position It Is Parti 1 (96.52 KiB) Viewed 37 times

2. The leading brewery on the West Coast (labeled A) has hired an OR analyst to analyze its market position. It is particularly concerned about its major competitor (labeled B). The analyst believes that brand switching can be modeled as a Markov chain using three states, with states A and B representing customers drinking beer produced from the aforementioned breweries and state C representing all other brands. Data are taken monthly, and the analyst has constructed the following (one-step) transition matrix from past data. a) What are the steady-state market shares for the two major breweries? A B C A 0.7 0.2 0.1 B 0.2 0.75 0.05 C 0.1 0.1 0.8 b) Find all expected first passage times? c) If the costs of not being preferred C(A)=$2, C(B)=$1 C(C)=$5, find long term expected cost.