Solution Manual for Mathematical Applications for the Management, Life, and Social Sciences,

Solution Manual for Mathematical Applications for

the Management, Life, and Social Sciences, 12th
Edition, Ronald J. Harshbarger, James J. Reynolds

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Chapter 7: Introduction to Probability

22. a. T O
ª 0.80 0.20 º Text
A «0.07 0.93» Other
¬ ¼
b. >0.25 0.75@ ˜ A >0.2525 0.7475@
>0.2525 0.7475@ ˜ A >0.254325 0.745675@
>0.2543 0.7457 @ ˜ A >0.25565725 0.74434275@
Percent of market share 3 editions later is  25.6%.
ª 0.80 0.20 º
c. > V1 V2 @ « » > V1 V2 @
¬0.07 0.93¼
­0.8V1  0.07V2 V1
®
¯0.2V1  0.07V2 0
­0.2V1  0.93V2 V2
®
¯0.2V1  0.07V2 0
7 7 20
V1 V2 , V1  V2 1 gives V1 , V2 .
20 27 27
ª 7 20 º 7
Steady-state vector is « , » . Hence the percent of market this text will have is 27 | 25.9%.
¬ 27 27 ¼

Chapter 7 Extended Applications __________________________________________________

I. Phone Numbers
1. Answers will vary. As an example, all area codes used to have a middle digit of 0 or 1.
2. This depends on the number of area codes available before 1995. Assuming that a phone number can have
any digit in any position, the number of possible phone numbers for each area code is 107 10, 000, 000 .
3. Answers will vary. As an example, the middle digit can be anything except 9.
4. This depends on the number of area codes currently available. See exercise 2.
5. Answers will vary. As an example, all restrictions on the middle digit could be dropped.
6. Assuming a phone number with a 555 prefix can have any digit in any of the four remaining positions, the
number of possible phone numbers for each area code of TV Land is 104 10, 000.

7. 2 ˜104 20, 000

8. For each area code there are 107  104 9,990, 000 currently available phone numbers.

394 Harshbarger Mathematical Applications, 9E, Complete Solutions Manual, © 2009 Brooks/Cole, Cengage Learning
Solution Manual for Mathematical Applications for the Management, Life, and Social Sciences,
Chapter 7: Introduction to Probability

II. Competition in the Telecommunications Industry

1. The initial probability vector is A >0.85 0.10 0.05@ .
Next Year
The transition matrix T is Given Year AT&T IDT USS
AT&T ª 0.85 0.10 0.05 º
T IDT « 0.90 0.05 »»
«0.05
USS «¬0.20 0.10 0.70 »¼
ª0.85 0.10 0.05 º
AT > 0.85 0.10 0.05@ ««0.05 0.90 0.05 »» > 0.7375 0.18 0.0825@
«¬0.20 0.10 0.70 »¼
Thus next year, about 74% of the population will be using AT&T, 18% will be using IDT and about 8%
will be using US Sprint.
2. To determine the long-term end result, we must find the steady-state vector by solving
ª 0.85 0.10 0.05º
> 1 2 3 @ ««0.05 0.90 0.05»» >V1 V2 V3 @
V V V
«¬0.20 0.10 0.70 »¼
­0.85V1  0.05V2  0.20V3 V1 ­0.15V1  0.05V2  0.20V3 0
° °
®0.10V1  0.90V2  0.10V3 V2 o ® 0.10V1  0.10V2  0.10V3 0
°0.05V  0.05V  0.70V V3 ° 0.05V  0.05V  0.30V 0
¯ 1 2 3 ¯ 1 2 3

ª 0.15 0.05 0.20 0 º ª 0.10 0.10 0.10 0 º ª 1 1 1 0º

« 0.10 0.10 0.10 0 » o « 0.15 0.05 0.20 0 »
« » « » o « 1.5 0.5 2.0 0 »» o
«
«¬ 0.05 0.05 0.30 0 »¼ «¬ 0.05 0.05 0.30 0 »¼ «¬ 0.5 0.5 3.0 0 »¼
ª1 1 1 0º ª1 1 1 0º ª1 0 2.5 0º
«0 1 3.5 0 » o « 0 1 3.5 0 » o «0 1 3.5 0 »»
« » « » «
«¬0 1 3.5 0 »¼ «¬ 0 1 3.5 0 »¼ «¬0 0 0 0 »¼
Thus V1 2.5V3 and V2 3.5V3 . The probability vector satisfying these conditions and V1  V2  V3 1
1 §1· 5
must satisfy 2.5V3  3.5V3  V3 1. Thus, 7V3 1 or V3. Then, we have V1 2.5 ¨ ¸ | 0.36 and
7 © 7 ¹ 14
§1· 7 ª 5 7 1º
V2 3.5 ¨ ¸ 0.50. The steady-state vector is « » . Therefore, the long-term results of
© 7 ¹ 14 ¬14 14 7 ¼
this pattern of change is that 36% of the population will be using AT&T, 50% will be using IDT and 14%
will be using US Sprint.
3. US Spring gains market share because, although it loses 30% of its 5000 customers, it gains 5% of AT&T’s
and IDT’s 95,000 customers. Gaining a small percentage of a large number of customers more than covers
losing a large percent of a small number of customers.
4. Plan A would increase IDT’s retention rate by 5%: (5%)(10,000) = 500 people
Plan B would increase the percentage of people switching from AT&T to IDT by 1%:
(1%)(85,000) = 850 people
IDT should choose Plan B.
5. A year later IDT has 18,000 customers and AT&T has 73,750 customers.
Plan A: (5%)(18,000) = 900 people
Plan B: (1%)(73,750) = 737 people
Thus, a year later, IDT should implement Plan A.

Harshbarger Mathematical Applications, 9E, Complete Solutions Manual, © 2009 Brooks/Cole, Cengage Learning 395
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