Applications of markov chains in business, Mathematics

please help me in my assignment, explain Applications of Markov Chains in Business.

Posted Date: 2/12/2013 5:22:22 AM | Location : United States

Applications of Markov Chains in Business

The Markov chains or processes are frequently applied given as:-

1. Brand Switching

By utilizing the transitional probabilities we can be capable to express the manner whether consumers switch their tastes from one product to another.

2. Insurance industry

Markov analysis may be utilized to study the claims made by the insured persons and decide also the level of premiums to be paid in future.

3. Movement of urban population

By formulating a transition matrix for the recent population in the urban areas, one can be capable to find out what the population will be in say 5 years.

4. Movement of customers from one bank to another.

It is a fact that customers tend to look for efficient banks. Hence at a specific time when a given bank installs such machinery like computers it will tend to attract a number of customers who will move from specific banks to efficient ones.

Posted by Archie | Posted Date: 2/12/2013 5:23:03 AM

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