Exercise 1.

XYZ insurance company charges its customers according to their accident

$ 530,000 (state 0); if you have had an accident in each of the last two year
you will be charged $ 517.000 (state 2) and if you had an accident the seco
state is given by the following c

According to Table 1 by applying the Markovian processes, finding the tran

and q the

a. What is the transition matrix resulting from proportionalit

b. What is the average pr

STATES E0 E1
EO 1230 820
E1 990 1155
E2 1125 1575
E3 780 780

STATES E0 E1
EO 0.25 0.35
E1 0.28 0.42
E2 0.2 0.15
E3 0 0

0.25 0.35
q= 0.28 0.42
0.2 0.15
0 0
 0,3W+0,3X+0,25Y+0,15Z
0,2W+0,35X+0,35Y+0,15Z
p*q= 0,25W+0,15X+0,4Y+0,25Z
0,25W+0,2X+0Y+0,45Z
W+X+Y+Z

(-0,7)W+0,3X+0,25Y+0,15Z
0,2W-0,65X+0,35Y+0,15Z
p*q= 0,25W+0,15X-0,6Y+0,25Z
0,25W+0,2X+0Y-0,55Z
W+X+Y+Z-1

W
X
Y
Z

W X
-0.7 0.3
0.2 -0.65
0.25 0.15
0.25 0.2
1 1

b.What is the average premium paid by a customer in Payoff, accor

State 0 $ 530,000
State 1 $ 719,000
State 2 $ 517,000
State 3 $ 778,000
 Exercise 1. Markov chains (steady state):

ding to their accident history. If you have not had accidents the last two years will be charg
h of the last two years you will be charged $ 719,000 (State 1); If you had accidents the firs
an accident the second of the last two years will be charged $ 778.000 (State 3). The histo
ven by the following cases of accident, taken in four different events.

esses, finding the transition matrix and solving the respective equations of p * q, where p is
and q the vector [W X Y Z]. Answer:

ng from proportionality according to the accident history?

What is the average premium paid by a customer in Payoff, according to historical accident r

E2 E3 TOTAL
1025 1025 4100
495 660 3300
1800 0 4500
1300 2340 5200

E2 E3 TOTAL
0.4 0 1
0.3 0 1
0.65 0 1
0 0 0

Ʃ
0.4 0 1
0.3 0 1 p=
0.65 0 1
0 0 0
+0,3X+0,25Y+0,15Z =W
0,35X+0,35Y+0,15Z =X
+0,15X+0,4Y+0,25Z =Y <- realizamos la matriz de la multiplicación de p*q
W+0,2X+0Y+0,45Z =Z
W+X+Y+Z =1

,3X+0,25Y+0,15Z =0
5X+0,35Y+0,15Z =0
15X-0,6Y+0,25Z =0 <- dejando todo igualado a 0
2X+0Y-0,55Z =0
W+X+Y+Z-1 =0

0.25
0.27 <- Resolviendo las ecuaciones
0.26
0.21

Y Z
0.25 0.15 0 0.000E+00
0.35 0.15 0 -1.38778E-17
-0.6 0.25 0 6.938894E-18
0 -0.55 0 0.0000E+00
1 1 -1 0

omer in Payoff, according to historical accident rate?

$ 630,425.8 <- rta

s the last two years will be charged for the new policy
e 1); If you had accidents the first of the last two years
ed $ 778.000 (State 3). The historical behavior of each
ent events.

ive equations of p * q, where p is the transition matrix

according to historical accident rate?

WXYZ
riz de la multiplicación de p*q
 Exercise 2. Markov chains (Initial state multiplication):

In Colombia there are 5 main mobile operators such as Tigo, Comcel, Movistar, ETB and U
states. The following chart summarizes the odds that each client has to stay in their curre
a change of company.

STATE TIGO COMCELMOVISTAR ETB

TIGO 0.25 0.15 0.35 0.1
COMCEL 0.2 0.35 0.15 0.1
MOVISTAR 0.35 0.2 0.2 0.2
ETB 0.15 0.25 0.05 0.25
UFF 0.15 0.25 0.3 0.15
The current percentages of each operator in the current market are for Tigo 0.2 for Comc
0.3, for ETB 0.1 and 0.1 for Uff (initial state).

According to Table 2 by applying the Markovian criteria, solve the multiplication of the i
(market share) by the probability matrix (transition matrix). Answer:

a. Find the probability that each user stays with the mobile
company for the 3 next periods.

STATE TIGO COMCELMOVISTAR ETB UFF

TIGO 0.25 0.15 0.35 0.1 0.15
COMCEL 0.2 0.35 0.15 0.1 0.2
MOVISTAR 0.35 0.2 0.2 0.2 0.05
ETB 0.15 0.25 0.05 0.25 0.3
UFF 0.15 0.25 0.3 0.15 0.15

TIGO COMCELMOVISTAR ETB UFF

0.2 0.3 0.3 0.1 0.1

TIGO COMCELMOVISTAR ETB UFF

0.245 0.245 0.21 0.15 0.15

TIGO COMCELMOVISTAR ETB UFF

0.229 0.240 0.217 0.151 0.164

TIGO COMCELMOVISTAR ETB UFF

0.228 0.240 0.216 0.153 0.163
ate multiplication):

mcel, Movistar, ETB and Uff, which we will call

t has to stay in their current operator or make
y.

UFF
0.15
0.2
0.05
0.3
0.15
t are for Tigo 0.2 for Comcel 0.3, for Movistar
initial state).

the multiplication of the initial state vector

ansition matrix). Answer:

s with the mobile

ds.

Po
0.2
0.3
0.3
0.1
0.1

<- Prob. Iniciales

<-Primer periodo

<- Segundo periodo

<- tercer periodo

 Exercise 3. Markov chains (Initial state multiplication):

In Colombia there are 6 main mobile operators such as Avantel, Tigo, Comcel, Movistar,
will call states. The following chart summarizes the odds that each client has to stay in
or make a change of company.

STATE TIGO COMCEL MOVISTAR ETB AVANTEL

TIGO 0.1 0.2 0.4 0.1 0.1
COMCEL 0.1 0.2 0.1 0.2 0.3
MOVISTAR 0.1 0.3 0.2 0.2 0.2
ETB 0.1 0.3 0.2 0.1 0.1
AVANTEL 0.1 0.15 0.35 0.1 0.1
UFF 0.1 0.2 0.2 0.3 0

The current percentages of each operator in the current market are for Tigo 0.1 for Co
0.3, for ETB 0.1, Avantel 0.1 and 0.2 for Uff (initial state).

According to Table 3 by applying the Markovian criteria, solve the multiplication of th

(market share) by the probability matrix (transition matrix). Answe

a.Find the probability that each user stays with the mobile company for the ne

STATE TIGO COMCEL MOVISTAR ETB AVANTEL

TIGO 0.1 0.2 0.4 0.1 0.1
COMCEL 0.1 0.2 0.1 0.2 0.3
MOVISTAR 0.1 0.3 0.2 0.2 0.2
ETB 0.1 0.3 0.2 0.1 0.1
AVANTEL 0.1 0.15 0.35 0.1 0.1
UFF 0.1 0.2 0.2 0.3 0

TIGO COMCEL MOVISTAR ETB AVANTEL

0.1 0.2 0.3 0.1 0.1

TIGO COMCEL MOVISTAR ETB AVANTEL

0.1 0.235 0.215 0.19 0.15

TIGO COMCEL MOVISTAR ETB AVANTEL

0.100 0.233 0.219 0.167 0.158

TIGO COMCEL MOVISTAR ETB AVANTEL

0.100 0.231 0.220 0.170 0.156
TIGO COMCEL MOVISTAR ETB AVANTEL
0.100 0.231 0.220 0.170 0.156
state multiplication):

el, Tigo, Comcel, Movistar, ETB and Uff, which we

t each client has to stay in their current operator
company.

UFF
0.1
0.1
0
0.2
0.2
0.2

ket are for Tigo 0.1 for Comcel 0.2, for Movistar
2 for Uff (initial state).

lve the multiplication of the initial state vector

(transition matrix). Answer:

mobile company for the nexts 4 periods.

UFF Po
0.1 0.1
0.1 0.2
0 0.3
0.2 0.1
0.2 0.1
0.2 0.2

UFF
0.2 <- P. Iniciales

UFF
0.11 <- Primer periodo

UFF
0.124 <- Segundo periodo

UFF
0.123 <- Tercer periodo
 UFF
0.123 <- Cuarto periodo
 Exercise 4. Markov chains (Initial state multiplication):

Suppose that 4 types of soft drinks are obtained in the market: Colombian, Pepsi Cola,
Cola when a person has bought Colombian there is a probability that they will continue
20% of which will buy Pepsi Cola, 10% that Fanta buys and 30% that Coca Cola consu
buyer currently consumes Pepsi Cola there is a probability that he will continue to buy
Colombian, 20% that Fanta consumes and 30% Coca Cola; if Fanta is currently consume
of it continuing to be consumed is 20%, 40% buy Colombian, 20% consume Pepsi Cola
Coca Cola. If you currently consume Coca Cola the probability that it will continue to c
20% buy Colombian, 20% that consumes Pepsi Cola and 10% that is passed to

At present, each Colombian brand, Pepsi Cola, Fanta and Coca Cola have the following
market share respectively (30%, 20%, 10% and 40%) during week 3.

According to the data by applying the Markovian criteria, solve the multiplication of t
vector (market share) by the probability matrix (transition matrix). Answe

COLOMBIANA PEPSI COLA FANTA

COLOMBIANA 40 20 10
PEPSI COLA 20 30 20
FANTA 40 20 20
COCA COLA 20 20 10

Matriz de transición
COLOMBIANA PEPSI COLA FANTA
COLOMBIANA 0.4 0.2 0.1
PEPSI COLA 0.2 0.3 0.2
FANTA 0.4 0.2 0.2
COCA COLA 0.2 0.2 0.1

COLOMBIANA PEPSI COLA FANTA

0.3 0.2 0.1

COLOMBIANA PEPSI COLA FANTA

0.28 0.22 0.13

COLOMBIANA PEPSI COLA FANTA

0.28 0.22 0.14
e multiplication):

Colombian, Pepsi Cola, Fanta and Coca

y that they will continue to consume 40%,
0% that Coca Cola consumes; when the
at he will continue to buy 30%, 20% buy
nta is currently consumed, the likelihood
20% consume Pepsi Cola and 20% go to
that it will continue to consume is 50%,
nd 10% that is passed to Fanta.

a Cola have the following percentages in

nd 40%) during week 3.

ve the multiplication of the initial state

transition matrix). Answer:

COCA COLA TOTAL

30 100
30 100
20 100
50 100

COCA COLA TOTAL

0.3 1
0.3 1
0.2 1
0.5 1

COCA COLA
0.4 <- Tercera semana

COCA COLA
0.37 <- Cuarta semana

COCA COLA
0.36 <- Quinta semana
 Exercise 5. Markov chains (Initial state multip

Suppose you get 6 types of Jeans brands in the Colombian mark

3, Brand 4, Brand 5 and Brand 6. The following table shows the
use the same brand or change it.

STATE BRAND 1 BRAND 2 BRAND 3 BRAND 4

BRAND 1 0.18 0.18 0.15 0.21
BRAND 2 0.14 0.18 0.2 0.19
BRAND 3 0.13 0.16 0.15 0.21
BRAND 4 0.22 0.16 0.18 0.2
BRAND 5 0.15 0.17 0.15 0.17
BRAND 6 0.17 0.15 0.17 0.19

At present, brand, have the following percentages in market share respecti

13% y 20%) during week 4.

According to the data by applying the Markovian criteria, solve the multipl
vector (market share) by the probability matrix (transition ma

a.Find the transition matrix.

b.Find the probability that each user stays with the mark or change to anoth

STATE BRAND 1 BRAND 2 BRAND 3 BRAND 4

BRAND 1 0.18 0.18 0.15 0.21
BRAND 2 0.14 0.18 0.2 0.19
BRAND 3 0.13 0.16 0.15 0.21
BRAND 4 0.22 0.16 0.18 0.2
BRAND 5 0.15 0.17 0.15 0.17
BRAND 6 0.17 0.15 0.17 0.19

BRAND 1 BRAND 2 BRAND 3 BRAND 4 BRAND 5

0.20 0.15 0.17 0.15 0.13

BRAND 1 BRAND 2 BRAND 3 BRAND 4 BRAND 5

0.17 0.17 0.17 0.20 0.18

BRAND 1 BRAND 2 BRAND 3 BRAND 4 BRAND 5

0.17 0.17 0.17 0.20 0.17
BRAND 1 BRAND 2 BRAND 3 BRAND 4 BRAND 5
0.17 0.17 0.17 0.20 0.17
s (Initial state multiplication):

the Colombian market: Brand 1, Brand 2, Brand

wing table shows the odds that you continue to
brand or change it.

BRAND 5 BRAND 6 TOTAL

0.18 0.1 1
0.15 0.14 1
0.2 0.15 1
0.18 0.06 1
0.15 0.21 1
0.19 0.13 1

arket share respectively (20%, 15%, 17%, 15%,

g week 4.

ria, solve the multiplication of the initial state

atrix (transition matrix). Answer:

or change to another for periodS 4, 5, 6 and period 7.

BRAND 5 BRAND 6
0.18 0.1
0.15 0.14
0.2 0.15
0.18 0.06
0.15 0.21
0.19 0.13

BRAND 6
0.20 <- Periodo 4

BRAND 6
0.13 <- Periodo 5

BRAND 6
0.13 <- Periodo 6
BRAND 6
0.13 <- Periodo 7
 A company dedicated to manufacturing different turned parts must decide whether to
manufacture a new product at its main plant, or if it buys it from an outside supplier. The profits
depend on the demand of the product. Table 10 shows projected profits, in millions of pesos.

Table 1. Decision process for the commercialization of tha product

Decision Demand low - Low average - High medium - High - demand

alternative utility utility demand utility demand utility
Manufacture 124 138 150 165
Subcontract 129 143 167 180
Buy 122 148 169 188
Lease 116 152 158 171
Leasing 119 131 167 172
Probabilities Ʃ = 0.25 0.3 0.3 0.15

0.23 124 28.52

0.3 138 41.4
Manufacture NODO 2
0.3 150 45
0.15 165 24.75
0.25 129 32.25
0.3 143 42.9
Subcontract NODO 3
0.3 167 50.1
0.15 180 27
0.25 122 30.5
NODO 1 0.3 148 44.4
Buy NODO 4
0.3 169 50.7
0.15 188 28.2
0.25 116 29
0.3 152 45.6
Lease NODO 5
0.3 158 47.4
0.15 171 25.65
0.25 119 29.75
0.3 131 39.3
Leasing NODO 6
0.3 167 50.1
0.15 172 25.8

VEsIP 153.8

VEcIP (0,25)*129+(0,3)*152+(0,3)*169+(0,15)*128 147.75

VEIP 147,75-153,8 -6.05

P(F/low) = 0,25 P(D/low) = 0,75
P(F/low average) = 0,35 P(D/ low average) = 0,65
P(F/high medium) = 0,3 P(D/ high medium) = 0,7
P(F/high) = 0,32 P(D/high) = 0,68

Probabilities Ʃ = 1 0.25 0.3 0.3 0.15

FAVORABLE
0.25 0.25 0.0625 0.20
ESTADO DE LA 0.3 0.35 0.105 0.34
NATURALEZA 0.3 0.3 0.09 0.29
0.15 0.32 0.048 0.16
0.3055 1

DESFAVORABLE
0.25 0.75 0.1875 0.27
ESTADO DE LA 0.3 0.65 0.195 0.28
NATURALEZA 0.3 0.7 0.21 0.30
0.15 0.68 0.102 0.15
0.6945 1

L
E 0.20 124
0.34 138
0 Manufacture NODO 4
0.29 150
,
3 0.16 165
0.20 129
0.34 143
Subcontract NODO 5
0.29 167
0.16 180
0.20 122
0.34 148
Buy NODO 6
0.29 169
0.16 188
0.20 116
0.34 152
Lease NODO 7
0.29 158
0.16 171
0.20 119
0.34 131
Leasing NODO 8

NODO 1
 Leasing NODO 8
0.29 167
0.16 172
NODO 1
0.27 124
0.28 138
D Manufacture NODO 9
E 0.30 150
S 0.15 165
F
A 0.27 129
V 0.28 143
O Subcontract NODO 10
0.30 167
R
A 0.15 180
B 0.27 122
L 0.28 148
E Buy NODO 11
0.30 169
0 0.15 188
, 0.27 116
7
0.28 152
Lease NODO 12
N 0.30 158
O
D 0.15 171
O 0.27 119
0.28 131
3 Leasing NODO 13
0.30 167
0.15 172

VEcIM 153.8

VEsIM 153.8

VEIM 0

EFFICIENCY 0
ide whether to
side supplier. The profits
s, in millions of pesos.

139.67

152.25

153.8

147.65

144.95
25.4
47.4
142.9
44.2
25.9
26.4
49.1
153
49.2
28.3
25.0 1
50.9 5
155.2 5
49.8 .
29.5 2
23.7
52.2
149.4
46.5
26.9
24.3
45.0
145.6

153.8
 145.6
49.2
27.0
33.5
153.8
38.7
141.8
45.4
24.2
34.8
40.2
151.9
50.5
26.4
32.9 1
41.6 5
153.2 3
51.1 .
27.6 2
31.3
42.7
146.9
47.8
25.1
32.1
36.8
144.7
50.5
25.3
The company is thinking of acquiring machinery with new technology to carry out its workshop work.
The purchase will be decided according to several alternatives presented by the seller (adaptability),
this to facilitate the implementation in the workshop. The decision variables presented below
represent the cost of adaptation that will arise after acquiring the machinery and training the workers
in their use. Table 11 shows the costs in millions of currency units per technology.

Event
Fits Fits
Does not
Alternative acceptabl successfu Fits well
fit
y lly
Technology 1 780 810 818 860
Technology 2 880 820 855 820
Technology 3 830 875 878 900
Technology 4 630 872 812 910

Determine the optimal size of the premises to be purchased, using the methods of LAPLACE, WALD,
HURWICZ AND SAVAGE. Hurwicz Alpha 0,70.

LAPLACE

Fits Fits
Does not
acceptabl successfu Fits well
fit
ALTERNATIVE y lly
Technology 1 780 810 818 860
Technology 2 880 820 855 820
Technology 3 830 875 878 900
Technology 4 630 872 812 910

WALD OR PESSIMISTIC

Fits Fits
Does not
acceptabl successfu Fits well
fit
ALTERNATIVE y lly
Technology 1 780 810 818 860
Technology 2 880 820 855 820
Technology 3 830 875 878 900
Technology 4 630 872 812 910

HURWICZ
 ALTERNATIVE MAX MIN HURWICZ
Technology 1 860 780 836
Technology 2 880 820 862
Technology 3 900 830 879
Technology 4 910 630 826

SAVAGE
EVENTS
Fits Fits
Does not
acceptabl successfu Fits well
fit
ALTERNATIVE y lly
Technology 1 780 810 818 860
Technology 2 880 820 855 820
Technology 3 830 875 878 900
Technology 4 630 872 812 910
880 875 878 910

Technology 1 100 65 60 50
Technology 2 0 55 23 90
Technology 3 50 0 0 10
Technology 4 250 3 66 0
y out its workshop work.
he seller (adaptability),
presented below
and training the workers
logy.

ods of LAPLACE, WALD,

LAPLACE
817
843.75
870.75
806
 To develop the task, it is necessary to consult the following reference:

PLAYER B
81 83 93 78 84
81 78 85 85 85
PLAYER A 83 91 80 86 81
89 83 85 93 83
85 89 88 78 83

Find the saddle point of the data given below in table 12 for players A and B

MINIMAX MAXMIN
78 89
78 91
80 93
83 93
78 85

89 83 85 93 83
-6 0 -2 -10 0

PLAYER A MAX
0
0
0 83
1
0
In order to determine the decision conditions in the market, the Game Theory will be
used, using the graphical solution of the type (2 x N) to estimate the strategy and value of
the game for the following data:

PLAYER 2
ESTRATEGY
A B

PLAYER 1
I 85 91
II 78 82
III 67 72

MINIMAX MAXMIN
85 85
An insurance company charges its customers according to their accident history. If
you have not had accidents the last two years are charged US $ 6000 (State 1); If
you have had an accident in each of the last two years you will be charged $ 6300
(State 2). If you had accidents the first of the last two years US $ 5800 (State 3). The
probabilities of the state according to historical data of three years are:

STATES E1 E2 E3
E1 0.25 0.35 0.4
E2 0.28 0.42 0.3
E3 0.2 0.15 0.65

STATES E1 E2 E3 TOTAL
E1 0.25 0.35 0.4 1
E2 0.28 0.42 0.3 1
E3 0.2 0.15 0.65 1
Determine what the average payment that the company will receive according to
the data in the table.