1.

Markov chains (steady state):

XYZ insurance company charges its customers according to their accident history. If you have not
had accidents the last two years will be charged for the new policy $ 530,000 (state 0); if you have
had an accident in each of the last two years you will be charged $ 719,000 (State 1); If you had
accidents the first of the last two years you will be charged $ 517.000 (state 2) and if you had an
accident the second of the last two years will be charged $ 778.000 (State 3). The historical
behavior of each state is given by the following cases of accident, taken in four different events.

According to Table 1 by applying the Markovian processes, finding the transition matrix and
solving the respective equations of p * q, where p is the transition matrix and q the vector [W X Y
Z]. Answer:

a. What is the transition matrix resulting from proportionality according to the accident
history?

B. What is the average premium paid by a customer in Payoff, according to historical accident
rate?
Exercise 2. Markov chains (Initial state multiplication):

In Colombia there are 5 main mobile operators such as Tigo, Comcel, Movistar,
ETB and Uff, which we will call states. The following chart summarizes the odds
that each client has to stay in their current operator or make a change of
company.

STATE TIGO COMCEL MOVISTAR 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

The current percentages of each operator in the current market are for Tigo
0.2 for Comcel 0.3, for Movistar 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 initial state vector (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.
Transition matrix
Exercise 3. Markov chains (Initial state multiplication):

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

STATE TIGO COMCEL MOVISTAR ETB AVANTEL UFF

TIGO 0,1 0,2 0,4 0,1 0,1 0,1
COMCEL 0,1 0,2 0,1 0,2 0,3 0,1
MOVISTAR 0,1 0,3 0,2 0,2 0,2 0
ETB 0,1 0,3 0,2 0,1 0,1 0,2
AVANTEL 0,1 0,15 0,35 0,1 0,1 0,2
UFF 0,1 0,2 0,2 0,3 0 0,2

The current percentages of each operator in the current market are for Tigo
0.1 for Comcel 0.2, for Movistar 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 the initial state vector (market share) by the probability
matrix (transition matrix). Answer:

a. Find the probability that each user stays with the mobile company for the
nexts 4 periods.
Exercise 4. Markov chains (Initial state multiplication):

Suppose that 4 types of soft drinks are obtained in the market: Colombian,
Pepsi Cola, Fanta and Coca Cola when a person has bought Colombian there is
a probability that they will continue to consume 40%, 20% of which will buy
Pepsi Cola, 10% that Fanta buys and 30% that Coca Cola consumes; when the
buyer currently consumes Pepsi Cola there is a probability that he will continue
to buy 30%, 20% buy Colombian, 20% that Fanta consumes and 30% Coca
Cola; if Fanta is currently consumed, the likelihood of it continuing to be
consumed is 20%, 40% buy Colombian, 20% consume Pepsi Cola and 20% go
to Coca Cola. If you currently consume Coca Cola the probability that it will
continue to consume is 50%, 20% buy Colombian, 20% that consumes Pepsi
Cola and 10% that is passed to Fanta.

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

According to the data by applying the Markovian criteria, solve the

multiplication of the initial state vector (market share) by the probability
matrix (transition matrix). Answer:

a. Find the transition matrix.

b. Find the probability that each user stays with the mark or change to
another for periodS 4, 5, 6 and period 7.
Exercise 5. Markov chains (Initial state multiplication):

Suppose you get 6 types of Jeans brands in the Colombian market: Brand 1,
Brand 2, Brand 3, Brand 4, Brand 5 and Brand 6. The following table shows the
odds that you continue to use the same brand or change it.

STATE BRAND 1 BRAND 2 BRAND 3 BRAND 4 BRAND 5 BRAND 6

BRAND 1 0,18 0,18 0,15 0,21 0,18 0,1
BRAND 2 0,14 0,18 0,2 0,19 0,15 0,14
BRAND 3 0,13 0,16 0,15 0,21 0,2 0,15
BRAND 4 0,22 0,16 0,18 0,2 0,18 0,06
BRAND 5 0,15 0,17 0,15 0,17 0,15 0,21
BRAND 6 0,17 0,15 0,17 0,19 0,19 0,13

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

(20%, 15%, 17%, 15%, 13% y 20%) during week 4.

According to the data by applying the Markovian criteria, solve the

multiplication of the initial state vector (market share) by the probability
matrix (transition matrix). Answer:

a. Find the transition matrix.

b. Find the probability that each user stays with the mark or change to
another for periodS 4, 5, 6 and period 7.