REPUBLIC OF THE PHILIPPINES

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

STO. TOMAS BRANCH
College of Engineering

Group No: 11
Leader: Melvrick T. Zulueta
Members:
1. John Neil De Castro
2. Joshua Magsino
3. Jhon Francis S. Talag

FINALS
ADVANCED ENGINEERING MATHEMATICS
FOR INDUSTRIAL ENGINEERING

Library Research:
Topic in Industrial Engineering Field with application of Advanced Engineering
Mathematics

Content:

Title Page – title of your library research, names of researchers and date of completion
Introduction – first part of research paper, it is where you provide the content in terms of
content of your research project
Sample Problem – shows a detailed solution of application of advanced engineering
mathematics in industrial engineering
Conclusion – analyzation and interpretation of data
References

Note: Border 1 in each side, Arial 12 Font Style

 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Markov Chain & Analyses as a Correlated Application of Advanced Mathematics

A Library Research
In Partial Fulfillment in the subject Advanced Mathematics for Industrial Engineering,
INEN 30083

Submitted to:

Engr. Billy Ray M. Oldan, MSEE

Submitted by:

De Castro, John Neil

Magsino, Joshua
Talag, Jhon Francis S.
Zulueta, Melvrick T.

July 2021
REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Introduction
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Sample Problem

1. Production and Manufacturing

Throughout 1980 up to 2017, 8300 million metric tons (Mt) of plastic were manufactured,
2600 Mt were utilized (both primary and secondary), 600 Mt were recycled, 4900 Mt were
wasted, and 800 Mt were burned. Let us now define 1 as production, 2 as use, 3 as
recycling, 4 as disposal, and 5 as incineration. As a result, the state space is S = {1, 2, 3,
4, 5}.
As a result, the state space is S = {1, 2, 3, 4, 5}. There are three transitory states
numbered {1, 2, 3} and two absorbing states numbered {4, 5}. The transition matrix P is
constructed using the information provided. The matrix P can alternatively be represented
as a transition diagram, as seen in Fig. 1.

0 1 0 ⋮ 0 0
0 0.29 0.07 ⋮ 0.55 0.09
0 1 0 ⋮ 0 0
𝑃=
⋯ ⋯ ⋯ ⋮ ⋯ ⋯
0 0 0 ⋮ 1 0
(0 0 0 ⋮ 0 1 )
Table 1. The average quantity of plastic visiting each lifecycle stage, given the initial condition of 407 Mt plastic manufactured in
2017.

Lifecycle Stage Average Quantity (Mt)

Production 407.00
Use 635.49
Recycling 42.84
Disposal 349.88
Incineration 57.12

Table 2. Market sectors using plastic and their mean usage periods in 2017.

Market Sector 2017 Primary Production Mean Lifetime

(%) (years)
Packaging 35.87 0.5
Transportation 6.63 13
Building and Construction 15.97 35
Electrical/Electronic 4.42 8
Consumer & Institutional 10.32 3
Products
Industrial Machinery 0.74 20
Textiles 14.50 5
Other 11.55 5
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering
Table 3. Plastic's average duration of stay at the use stage according to the market sector.

Market Sector Average duration of stay at the use stage

(years)
Packaging 0.78
Transportation 20.30
Building and Construction 54.65
Electrical/Electronic 12.49
Consumer & Institutional 4.68
Products
Industrial Machinery 31.23
Textiles 7.81
Other 7.81

The first row of (I – Q)-1 represents the estimated number of visits made by the plastic
beginning with the manufacturing stage. The manufacturing stage is visited once on
average, the usage stage is visited 1.56 times, and the recycling stage is visited 0.11
times. Because the plastic is recycled and reused, the number of visits during the usage
stage is more than one. The second row shows that if the plastic is now in the use stage,
it will visit the recycling stage 0.11 times. If the plastic is currently in the recycling stage,
it will be reused 1.56 times in the third row. The reused plastic will be recycled again,
resulting in an average of 1.11 visits to the recycling stage.

1 1.56 0.11
(𝐼 − 𝑄)−1 = (0 1.56 0.11)
0 1.56 1.11

The energy consumption of polyethylene (PET) during its lifespan is examined to

demonstrate the applicability of the equation indicated below.

𝑣 = 𝑊𝐸𝑡 + 𝑈𝐸𝑎 = 𝑝0 (𝐼 − 𝑄 )−1 (𝐸𝑡 + 𝑅𝐸𝑎 )

Let Et and Ea be column vectors that represent the environmental effect per unit while the
products are in their transitory and absorbing phases, respectively. Then comes the
projected overall environmental effect of items during their whole lifespan, designated as
v.

In 2017, the total amount of PET produced was 33E+03 kg. PET manufacturing takes 3
MJ/kg of energy, PET recycling requires 7.97 MJ/kg of energy, and PET combustion
recovers 27 MJ/kg of energy. Considering that PET use and disposal do not use or
recover energy, what is the average total energy consumption for PET manufacturing,
usage, and end-of-life in 2017?
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Solution

By using:
𝐼𝑖𝑗 = 𝑒𝑙𝑒𝑚𝑒𝑛𝑡 (𝑖, 𝑗) 𝑜𝑓 (𝐼 − 𝑄)−1 × 𝑑𝑗

Using the information in Table 2, the average duration of stay of plastic in each market
sector during the use phase may be calculated. The duration of plastic's presence in the
packaging market sector throughout the use stage is 0.5 element (1,2) of (I – Q)-1 = 0.78
years. The complete results are shown in Table 3. Using the preceding data and the
primary production percentages from 2017, the overall average duration of stay of plastic
at the usage stage is 35.87 percent 0.78 + 6.63 percent 20.30 +... + 11.55 percent 7.81
= 13.65 years.

then the average total energy consumption for the production, use, and end-of-life of PET
in 2017 was,
𝑣(𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛, 𝑢𝑠𝑒, 𝑑𝑖𝑠𝑝𝑜𝑠𝑎𝑙, 𝑖𝑛𝑐𝑖𝑛𝑒𝑟𝑎𝑡𝑖𝑜𝑛)
1 1.56 0.11 3 0 0
0
= (33𝐸 + 03,0,0) (0 1.56 0.11) (( 0 ) + (0.55 0.09) ( ))
−27
0 1.56 1.11 7.97 0 0
= 1632.63 𝑀𝐽

2. Marketing and Business Management

Suppose the convenience stores wanted to know the probability that a customer would
buy with them in month 3 given that the customer buys with them this month. This analysis
can be performed for each convenience store using decision trees, as shown below:
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

a.) What would be the probability on the third month that a customer will buy on 7-
Eleven? How about Ministop?
b.) On what month will the probability would go on Steady-State Markov Chain?
c.) Graph the Steady-State Markov Chain from the first month up to the month the
probability of two convenience stores become stable?
d.) If there were 3,000 customers in Brgy. Halang who purchases things and stuff,
then in the long run of operation day-to-night, what would be the expected number
of people who buys on 7-Eleven? What about on Ministop?
e.) Now suppose that 7-Eleven has decided it is getting less than a reasonable share
of the market and would like to increase its market share. See the given transition
matrix below:

0.70 0.30
T=[ ]
0.20 0.80
In other words, the improved system has resulted in smaller probability (0.30)
that customers who buys initially at 7-Eleven will switch to Ministop the next month.

Solution

a.) If a customer is presently buying things at 7-Eleven (Month 1), the following
probabilities exist.
Np (1) = 1.0; buying at 7-Eleven
Mp (1) = 0.0; buying at Ministop
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering
The matrix defines the starting conditions of the system, given that the customer buys at
7-Eleven, as in decision tree in Figure 1. In other words, a customer us originally buying
at 7-Eleven in the first month.
0.60 0.40
Month 2: [𝑁𝑝 (2) 𝑀𝑝 (2)] = [1.0 0.0] [ ] = [0.60 0.40]
0.20 0.80

0.60 0.40
Month 3: [𝑁𝑝 (3) 𝑀𝑝 (3)] = [0.60 0.40] [ ] = [0.44 0.56]
0.20 0.80

b.) The month that the probability will go steady:

0.60 0.40
Month 4: [𝑁𝑝 (4) 𝑀𝑝 (4)] = [0.44 0.56] [ ] = [0.38 0.62]
0.20 0.80

The state probabilities for several subsequent months are as follows:

Month 5: [𝑁𝑝 (5) 𝑀𝑝 (5)] = [0.35 0.65]
Month 6: [𝑁𝑝 (6) 𝑀𝑝 (6)] = [0.34 0.66]
Month 7: [𝑁𝑝 (7) 𝑀𝑝 (7)] = [0.34 0.66]
Month 8: [𝑁𝑝 (8) 𝑀𝑝 (8)] = [0.33 0.67]
Month 9: [𝑁𝑝 (9) 𝑀𝑝 (9)] = [0.33 0.67]
At Month 8, the state probability interchanges and becomes steady.

c.) Graph:

(Np i) and (Mp i)

1
0.9
0.8
0.65 0.66 0.66 0.67 0.67
0.7 0.6 0.6 0.62
0.56
Probability

0.6
0.5 0.44
0.4 0.4 0.38 0.35 0.34 0.34 0.33 0.33
0.4
0.3
0.2
0.1
0
1 2 3 4 5 6 7 8 9
Months (i)

7-Eleven Ministop
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Interpretation:
Mp (i) / Ministop exhibit the same characteristics as it approaches a value of 0.67 from
0.40. This is a potentially valuable result. In other words, the convenience store owner
can conclude that after a certain number of months in the future, there is a 0.33
probability that a customer will buy at 7-Eleven (Np i) if the customer initially buys in 7-
Eleven.

d.) Expected number of people:

7-Eleven: Np (3,000) = 0.33 (3,000)

7-Eleven = 990 customers
Ministop: Mp (3,000) = 0.67 (3,000)
Ministop = 2,010 customers

e.) Follow-up answer to d:

0.70 0.30
[𝑁𝑝 (2) 𝑀𝑝 (2)] = [𝑁𝑝 (2) 𝑀𝑝 (2)] [ ]
0.20 0.80
Np = 0.7Np + 0.2Mp
Mp = 0.3Np + 0.8Mp

Using the first equation and the fact that Mp = 1.0 – Np, we have;

Np = 0.7Np + 0.2 (1.0 – Np) = 0.7Np + 0.2 – 0.2 Np

0.5 Np =0.2
Np = 0.2/0.5
Np = 0.4

And thus;

Mp = 1 – Np = 1 – 0.4 = 0.6

This means that out of the 3,000 customers, 7-Eleven will not get 1,200 customers (i.e.,
0.40 x 3,000) in any given month in the long run. Thus, improvement in the system will
result in an increase of 210 customers per month (if the new transition probabilities remain
constant for a long period of time in the future). In the specified situation, 7-Eleven must
evaluate the trade-off between the cost of the improved system and the increase in profit
from the additional 210 customers. For example, if the improved service costs P1,000 per
month, then the extra 210 customers must generate an increase profit greater than
P1,000 to justify the decision to improve the abovementioned system.
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

3. Finance and Economics

The accounts receivable for the ABC Kabalikat Company is denoted by the transition
matrix given below:

Where:
p = paid debt
b= bad debt/unpaid debt
1 and 2 = referring to months/longevity

a.) What is the probability that the debt will eventually get paid and the probability that
the accounts received by the insurance company will result in a bad debt?
b.) Supposed the ABC Kabalikat Company has accounts receivable of P4000 in the
first month and P6000 in the second month. Determine the portion in which these
funds will be collected and what portion will result in bad debt.

Solution

a.) The probability that the debt will become bad and paid:

Notice that once a debt was paid, then the probability of moving to state 1, 2, or b is zero.
If the debt is month old, there is a 0.70 probability that it will be paid in the next month
and a 0.30 probability that it will go to month 2 unpaid. If the debt is in month 2, there is a
0.50 probability that it will be paid and a 0.50 probability that it will become a bad debt in
the next time period. Finally, if the debt is bad, there is a zero probability that it will return
to any previous state.
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Dividing the transition matrix into submatrices:

Where:

Given the fundamental matrix:

𝐹 = (𝐼 − 𝑄)−1

The fundamental matrix indicates the expected number of times the system will be in any
of the non-absorbing states before the absorption occurs (i.e., before the debt becomes
bad or is paid). Thus, according to F, if the customer is in state 1 (one month late in paying
the debt), the expected number of times the customer would be two months late would
be 0.30 before the debt is paid or becomes bad.
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

The F x R matrix reflects the probability that the debt will eventually be absorbed given
any starting state. For the first month, there is a 0.85 probability that the debt will be paid
and 0.15 probability that it will lead to a bad debt. In the second month, there is both 0.50
probability that it will eventually paid or lead to a bad debt.

b.) Determination of Accounts Receivable (AR):

Thus, of the total P10,000 owed, the ABC Kabalikat Company can expect to receive
P6,400 and P3,600 will become bad debts.

4. Time and Methods Study

The specific machine repair model has a computer system that may malfunction and
a single technician who fixes it when it does fail. The machine can be in one among five
states:
Idle Busy Waiting Broken In Repair
Idle 0.05 0.93 0 0.02 0
Busy 0.10 0.43 0.43 0.04 0
Waiting 0 0.60 0.35 0.05 0
Broken 0 0 0 0.80 0.20
In Repair 0.75 0 0 0 0.25

a.) Given the transition matrix, what is the fraction of time that the system is broken?
b.) How about what is the fraction of time that the model is in both in repair and
broken?
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Solution

a.) Construct the transition matrix:

0.05 0.93 0 0.02 0
0.10 0.43 0.43 0.04 0
𝑃= 0 0.60 0.35 0.05 0
0 0 0 0.80 0.20
(0.75 0 0 0 0.25)

0.0797 0.4284 0.2834 0.1645 0.0439

0.0797 0.4284 0.2834 0.1645 0.0439
𝑃20 = 0.0797 0.4284 0.2834 0.1645 0.0439
0.0797 0.4284 0.2834 0.1645 0.0439
(0.0797 0.4284 0.2834 0.1645 0.0439)

[𝑉, 𝑑 ] = 𝑒𝑖𝑔(𝑃′ )

−0.2724 0 0 0 0
0 1.0000 0 0 0
𝑑= 0 0 0.1098 0 0
0 0 0 0.3157 0
( 0 0 0 0 0.7270)

𝑣 (: , 2) = [ −0.1458, −0.7832, −0.5181, −0.3007, −0.0802]

𝑠𝑢𝑚 𝑣 (: , 2) = [ −1.8280]

𝑣 (: , 2)
𝜋=
𝑠𝑢𝑚 𝑣 (: , 2)

For each entry, divide the entries of 2 nd vector by the sum of the acquired 2 nd
vector which is equal to -1.8280. whereas;
0.0797
0.4282
𝜋 = 0.2834
0.1645
(0.0439)
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

−0.95 0.93 0 0.02 0

0.10 −0.57 0.43 0.40 0
𝑃 − 𝐽5 = 0 0.60 −0.65 0.05 0
0 0 0 −0.20 0.20
( 0.75 0 0 0 −0.75)

−0.95 0.93 0 0.02 1

0.10 −0.57 0.43 0.40 1
𝑃1 = 0 0.60 −0.65 0.05 1
0 0 0 −0.20 1
( 0.75 0 0 0 1)

[0 0 0 0 1]
𝜋=
𝑃1

0.0797
0.4282
𝜋 = 0.2834
0.1645
(0.0439)

a.) The fraction of time that the model is broken is 0.1645 or 16.45% of the time.
b.) The fraction of time that the model is in both in repair and broken is 0.2084 in
probability or 20.84% of the time.
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

Conclusion

1. Production and Manufacturing

Aside from estimating the expected overall environmental effect of goods, a Markov
chain model can predict the number of visits made by products to a lifetime stage, the
estimated number of products that visits a lifecycle stage, and the products' mean
duration of stay in a lifecycle stage. A Markov chain can also offer absorption probabilities.
The probabilities can be used to anticipate the quantity of goods that will be discarded or
burned.

Furthermore, the Markov chain model estimates the average environmental effect
based on the amount of environmental damage per unit mass. This can help to reduce
errors in calculating average environmental impacts. Because the products of an
industrial sector are the aggregate of the products of all industries in that sector, the use
of monetary units may result in inaccuracies in physical flows within the sectors of the
economy. In probability theory and operations research, the Markov chain is a well-known
concept. It has been used in a variety of fields, including physics, chemistry, computer
science, queuing theory, economics, gaming, and sports.

The Markov chain is used to simulate a product's lifespan. The model is combined with
data on product lifespan and the findings of an LCA study. The number of visits and
duration of stay of a product in a certain lifetime stage, the number of items visiting a
specific lifecycle stage, the likelihood of a product being discarded and burned, and the
estimated overall environmental effect of the product are predicted based on this. The
model is based on the assumption that the product has a stable transition probability.

According to the findings, plastic will visit the manufacture, usage, and recycling phases
once, 1.56, and 0.11 times, respectively. The average period of stay of plastic in the usage
stage (across all market sectors) is 13.65 years. The estimated result implies that the
quantity of plastic visited use and recycling phases is 635.49 Mt and 42.84 Mt,
respectively, out of 407 Mt plastic generated in 2017. The computed value indicates that
the overall energy consumption level (for the manufacturing, usage, discard, and
incineration stages) was 0.05 MJ/kg in 2017.

2. Marketing and Business Management

a.) 7-Eleven become dominant and considered the starting state, the state
probabilities computed become constants after a several periods/durations.
However, notice that the eventual state probabilities (i.e., 0.33 and 0.67) achieved
when Ministop is the starting state are exactly the same as the previous state
probabilities achieved when 7-Eleven was the starting state. In other words, the
probability of ending up in a particular state in the future is not dependent on the
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering
starting state. Thus, in third month, it clearly observed that it is the start wherein
the interchange of probabilities will happen to increase to Ministop gaining almost
0.72 state probability = 72% while 7-Eleven is 0.28 state probability = 28%.

b.) At Month 8, the state probability interchanges and becomes steady. In a Markov
process after a number of periods have passed, the probabilities will approach
steady state. The steady-state probabilities are average probabilities that the
system will be in a certain state after a large number of transition periods.

c.) Mp (i) / Ministop exhibit the same characteristics as it approaches a value of 0.67
from 0.40. This is a potentially valuable result. In other words, the convenience
store owner can conclude that after a certain number of months in the future,
there is a 0.33 probability that a customer will buy at 7-Eleven (Np i) if the
customer initially buys in 7-Eleven. The Breakeven point is in the third month
wherein the interchange of state probabilities started to change and as it
progresses in periods, the probabilities become constant and steady.

d.) If there would be 3,000 customers then in 7-Eleven: Np (3,000) = 0.33 (3,000) =
there are about 990 customers while in Ministop: Mp (3,000) = 0.67 (3,000) =
there are about 2,010 customers.

e.) This means that out of the 3,000 customers, 7-Eleven will not get 1,200 customers
(i.e., 0.40 x 3,000) in any given month in the long run. Thus, improvement in the
system will result in an increase of 210 customers per month (if the new transition
probabilities remain constant for a long period of time in the future). In the specified
situation, 7-Eleven must evaluate the trade-off between the cost of the improved
system and the increase in profit from the additional 210 customers. For example,
if the improved service costs P1,000 per month, then the extra 210 customers must
generate an increase profit greater than P1,000 to justify the decision to improve
the abovementioned system.

3. Finance and Economics

a.) The F x R matrix reflects the probability that the debt will eventually be absorbed
given any starting state. For the first month, there is a 0.85 probability that the debt
will be paid and 0.15 probability that it will lead to a bad debt. In the second month,
there is both 0.50 probability that it will eventually paid or lead to a bad debt.

b.) Thus, of the total P10,000 owed, the ABC Kabalikat Company can expect to
receive P6,400 and P3,600 will become bad debts.
 REPUBLIC OF THE PHILIPPINES
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
STO. TOMAS BRANCH
College of Engineering

4. Time and Methods Study

a.) The fraction of time that the model is broken is 0.1645 or 16.45% of the time.
b.) With the steady state probabilities, the fraction of time that the system is broken
is the probability that the model is in either/both of the states broken or in repair,
or 20.84% of the time. Increasing the proportion of time that the system is not
broken by either enhancing its reliability (lowering the likelihood that the model
transitions from idle, busy, or waiting to broken) or decreasing the time it takes
the repairman to start working on the system when it is broken. Assume we
choose the latter method. Reducing the probability that the model makes the
transition back to state broken given that it is in state broken from 0.8 to 0.2,
we find that π= (0.0910,0.4887,0.3233,0.0469,0.0500)T, and the machine is
broken only 9.69% of the time.