Problem 1.

Markov chains (steady state):

To develop the task, it is necessary to consult the following reference:

XYZ insurance company charges its customers according to their accident history. If you h
will be charged for the new policy $ 715,000 (state 0); if you have had an accident in each
$ 835,000 (State 1); If you had accidents the first of the last two years you will be charge
accident the second of the last two years will be charged $ 813.000 (State 3). The historic
following cases of accident, taken in four different events.

PART 13. Markov chains (steady state):

According to Table 1 by applying the Markovian processes, ie finding the transition matrix
* 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 his

RESOLVIENDO LOS CUATRO ESTADOS

EO: No ha tenido accidentes en los últimos dos años se cobrará por la nueva política
E1: Ha tenido un accidente en cada uno de los últimos dos años, se le cobrará $835,
E2: Si tuvo accidentes el primero de los últimos dos años se le cobrará $ 789.000
E3: si tuvo un accidente, el segundo de los últimos dos años será Se cobra $ 813.00

STATES EO E1 E2 E3 TOTAL
EO 920 1380 1840 460 4600
E1 1740 0 1160 2900 5800
E2 900 900 1800 900 4500
E3 1140 1520 0 1140 3800

STATES EO E1 E2 E3 TOTAL
EO 0.2 0.3 0.4 0.1 1
E1 0.3 0 0.2 0.5 1
E2 0.2 0.2 0.4 0.2 1
E3 0.3 0.4 0 0.3 1
 ∑
W 0.2 0.3 0.4 0.1 = 1
X q: 0.3 0 0.2 0.5 = 1 p:
Y 0.2 0.2 0.4 0.2 = 1
Z 0.3 0.4 0 0.3 = 1

aw+bx+cy+dz+e=0 donde w,x,y,z son las variables y e el termino independienteigualados a 0

EC1 0,2W-W+0,3X+0,2Y+0,3Z =0 EO E1 E2 E3
EC2 0,3W+0X-X+0,2Y+0,4Z =0 W X Y Z
EC3 0,4W+0,2X+0,4Y-Y+0Z =0 0.2505 0.2329 0.2446 0.2720
EC4 0,1W+0,5X+0,2Y+0,3Z-Z =0
EC5 W+X+Y+Z-1 =0 COEFICIENTES
W X Y Z INDEP
EC1 -0.8 W+0.3 X+0.2 Y+0.3 Z =0 -0.8 0.3 0.2 0.3 0
EC2 0,3 W- X+ 0,2 Y+0,4 Z =0 0.3 -1 0.2 0.4 0
EC3 0,4 W+0,2 X -0,6 Y =0 0.4 0.2 -0.6 0 0
EC4 0,1 W+0,5 X+0,2 Y - 0,7 Z =0 0.1 0.5 0.2 -0.7 0
EC5 W+X+Y+Z-1 =0 1 1 1 1 -1

b.   What is the average premium paid by a customer in Payoff, according to historical accid

La prima promedio que se paga en la compañía XYZ es: 0,2505*715,000 + 0,2329*835,000 + 0,2446* 789,000 + 0,2720* 81
 t history. If you have not had accidents the last two years
n accident in each of the last two years you will be charged
you will be charged $ 789.000 (state 2) and if you had an
te 3). The historical behavior of each state is given by the

transition matrix and solving the respective equations of p

:

to the accident history?

la nueva política $ 715,000

e le cobrará $835,000
rará $ 789.000
Se cobra $ 813.000
 q*p
EC1 0,2W+0,3X+0,2Y+0,3Z =W
[W X Y Z] EC2 0,3W+0X+0,2Y+0,4Z =X
EC3 0,4W+0,2X+0,4Y+0Z =Y
EC4 0,1W+0,5X+0,2Y+0,3Z =Z
EC5 W+X+Y+Z =1

eigualados a 0

IGUAL A

0.00000
0.00000
0.00000
0.00000
0.00000

to historical accident rate?

6* 789,000 + 0,2720* 813,000 $ 787,705

Problem 2. Markov chains (Initial state multiplication):

To develop the task, it is necessary to consult the following reference:

Ibe, O. (2013). Markov Processes for Stochastic Modeling: Massachusetts, USA: U

knowledge environment of the course.

In
In Colombia
Colombiathere
thereare 5 main
are mobile
5 main operators
mobile such as
operators Tigo,
such as Comcel, Movistar,
Tigo, Comcel, ETB and E
Movistar, U
odds that eachthe
summarizes client hasthat
odds to stay
eachin client
their current
has tooperator or make
stay in their a change
current of company.
operator or mak

STATE TIGO COMCEL MOVISTAR ETB UFF

TIGO 0.1 0.2 0.4 0.1 0.2
COMCEL 0.3 0.2 0.1 0.2 0.2
MOVISTAR 0.1 0.3 0.2 0.2 0.2
ETB 0.1 0.3 0.2 0.1 0.3
UFF 0.1 0.2 0.3 0.3 0.1
The current percentages of each operator in the current market are for Tigo 0.3 for Comce

PART 14. Markov Chains (Initial State Multiplication):

According to Tables 2 and 3 by applying the Markovian criteria, solve the multiplication of
(transition matrix). Answer:
a.   Find the probability that each user stays with the mobile company for the next period.

MATRIZ DE PROBABILIDADES DE TRANSICION

TIGO V 0.1 0.2 0.4 0.1

COMCEL W q: 0.3 0.2 0.1 0.2
MOVISTAR X 0.1 0.3 0.2 0.2
ETB Y 0.1 0.3 0.2 0.1
UFF Z 0.1 0.2 0.3 0.3

aw+bx+cy+dz+e=0 donde w,x,y,z son las variables y e el termino independienteigualados a 0

EC1 0,1V-V +0,3W+0,1X+0,1Y+0,1Z =0 TIGO COMCEL MOVISTAR

EC2 0,2V+0,2W-W+0,3X+0,3Y+0,2Z =0 V W X
EC3 0,4V+0,1W+0,2X-X+0,2Y+0,3Z =0 0.1482 0.2412 0.2254
EC4 0,1V+0,2W+0,2X+0,1Y-Y+0,3Z =0
EC5 0,2V+0,2W+0,2X+0,3Y+0,1Z-Z =0
EC6 V+W+X+Y+Z-1 =0
COEFICIENTES
EC1 -0.9 V+ 0.3W +0.1 X+0.1 Y+0.1 Z =0 V W X
EC2 0,2 V -0,8 W+ 0,3 X+ 0,3 Y+0,2 Z =0 -0.9 0.3 0.1
EC3 0,4 V +0,1 W-0,8 X +0,2 Y+0,3Z =0 0.2 -0.8 0.3
EC4 0,1 V+0,2 W+0,2 X-0,9 Y + 0,3 Z =0 0.4 0.1 -0.8
EC5 0,2V +0,2W +0,2X +0,3Y -O,9Z =0 0.1 0.2 0.2
EC6 V+W+X+Y+Z-1 =0 0.2 0.2 0.2
1 1 1
a.   Find the probability that each user stays with the mobile company for the next

0.1 0.2 0.4 0.1

0.3 0.2 0.1 0.2
=(0,3 0, 2 0,3 0,1, 0,1 ) 0.1 0.3 0.2 0.2
0.1 0.3 0.2 0.1
0.1 0.2 0.3 0.3

= 0.14 0.24 0.25 0.17

La probabilidad de que cada usuario permanezca en tigo es de 14%

La probabilidad de que cada usuario permanezca en Comcel es de 24%
La probabilidad de que cada usuario permanezca en Movistar es de 25%
La probabilidad de que cada usuario permanezca en ETB es de 17%
La probabilidad de que cada usuario permanezca en UFF es de 20%
g reference:

Massachusetts, USA: University of Massachusetts Editorial. Available in the

mcel,
go, Movistar,
Comcel, ETB and ETB
Movistar, Uff, which we which
and Uff, will callwe
states.
will The
call following chart
states. The summarizes
following the
chart
e a change
urrent of company.
operator or make a change of company.

are for Tigo 0.3 for Comcel 0.2, for Movistar 0.3, for ETB 0.1 and 0.1 for Uff (initial state).

olve the multiplication of the initial state vector (market share) by the probability matrix

pany for the next period.

∑ q*p
0.2 = 1 EC1 0,1 V+0,3W+0,1X+0,1Y+0,1Z
0.2 = 1 p: [V W X Y Z] EC2 0,2 V+0,2W+0,3X+0,3Y+0,2Z
0.2 = 1 EC3 0,4V+0,1W+0,2X+0,2Y+0,3Z
0.3 = 1 EC4 0,1V+0,2W+0,2X+0,1Y+0,3Z
0.1 = 1 EC5 0,2V+0,2W+0,2X+0,3Y+0,1Z
EC6 V+W+X+Y+Z

mino independienteigualados a 0

ETB UFF
Y Z
0.1864 0.1987647

IGUAL A
Y Z INDEP
0.1 0.1 0 0.00000
0.3 0.2 0 0.00000
0.2 0.3 0 0.00000
-0.9 0.3 0 0.00000
0.3 -0.9 0 0.00000
1 1 -1 0.00000
e company for the next period.

0.2
0.2
0.2
0.3
0.1

0.2
0,3W+0,1X+0,1Y+0,1Z =V
0,2W+0,3X+0,3Y+0,2Z =W
0,1W+0,2X+0,2Y+0,3Z =X
0,2W+0,2X+0,1Y+0,3Z =Y
0,2W+0,2X+0,3Y+0,1Z =Z
=1
Problem 3. Markov chains (Initial state multiplication):

In Colombia there are 6 main mobile operators such as Avantel, Tigo, Comcel, Movistar, ETB
odds that each client has to stay in their current operator 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 0.3 0 0.2 0.2 0.2
UFF 0.1 0.2 0.2 0.3 0

The current percentages of each operator in the current market are for Avantel 0.1, Tigo 0.2

PART 14. Markov Chains (Initial State Multiplication):

According to Tables 2 and 3 by applying the Markovian criteria, solve the multiplication of the
matrix). Answer:
a.   Find the probability that each user stays with the mobile company for the next period.
MATRIZ DE PROBABILIDADES DE TRANSICION

TIGO U 0.1 0.2 0.4

COMCEL V q: 0.1 0.2 0.1
MOVISTAR W 0.1 0.3 0.2
ETB X 0.1 0.3 0.2
AVANTEL Y 0.3 0 0.2
UFF Z 0.1 0.2 0.2

aw+bx+cy+dz+e=0 donde w,x,y,z son las variables y e el termino independiente

EC1 0,1U - U +0,2 V+0,4W+0,1X+0,1Y+0,1Z =0 TIGO COMCEL

EC2 0,1U+0,2 V- V +0,1W+0,2X+0,3Y+0,1Z =0 U V
EC3 0,1U+0,3V+0,2W- W+0,2X+0,2Y+0Z =0 0.1667 0.1667
EC4 0,1U+0,3V+0,2W+0,1X-X+0,1Y+0,2Z =0
EC5 0,3U+0V+0,2W+0,2X+0,2Y-Y+0,1Z =0
EC6 0,1U + 0,2V+ 0,2W +0,3X +0Y+0,2 Z-Z =0
EC7 U+V+W+X+Y+Z-1 =0

COEFICIENTES
EC1 -0,9 U +0,2 V+0,4W+0,1X+0,1Y+0,1Z =0 U V
EC2 0,1U-0,8 V +0,1W+0,2X+0,3Y+0,1Z =0 -0.9 0.2
EC3 0,1U+0,3V-0,8 W+0,2X+0,2Y+0Z =0 0.1 -0.8
EC4 0,1U+0,3V+0,2W-0,9X+0,1Y+0,2Z =0 0.1 0.3
EC5 0,3U+0V+0,2W+0,2X-0,8Y+0,1Z =0 0.1 0.3
EC6 0,1U + 0,2V+ 0,2W +0,3X +0Y-0,8 Z =0 0.3 0
EC7 U+V+W+X+Y+Z-1 =0 0.1 0.2
1 1

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

0.1 0.2 0.4

0.1 0.2 0.1
=(0,2 0, 2 0,3 0,1, 0,1 0,2) 0.1 0.3 0.2
0.1 0.3 0.2
0.3 0 0.2
0.1 0.2 0.2

= 0.13 0.24 0.24

La probabilidad de que cada usuario permanezca en tigo es de 13%

La probabilidad de que cada usuario permanezca en Comcel es de 24%
La probabilidad de que cada usuario permanezca en Movistar es de 24%
La probabilidad de que cada usuario permanezca en ETB es de 21%
La probabilidad de que cada usuario permanezca en UFF es de 17%
La probabilidad de que cada usuario permanezca en Avantel es de 11%
, Comcel, Movistar, ETB and Uff, which we will call states. The following chart summarizes the
change of company.

UFF
0.1
0.1
0
0.2
0.1
0.2

or Avantel 0.1, Tigo 0.2 for Comcel 0.2, for Movistar 0.3, for ETB 0.1 and 0.2 for Uff (initial state).

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

for the next period.

∑
0.1 0.1 0.1 = 1
0.2 0.3 0.1 = 1
0.2 0.2 0 = 1 p: [U V W X Y Z]
0.1 0.1 0.2 = 1
0.2 0.2 0.1 = 1
0.3 0 0.2 = 1

les y e el termino independienteigualados a 0

MOVISTAR ETB AVANTEL UFF

W X Y Z
0.1667 0.1667 0.16666667 0.16666667

IGUAL A
W X Y Z INDEP
0.4 0.1 0.1 0.1 0 0.00000
 0.1 0.2 0.3 0.1 0 0.00000
-0.8 0.2 0.2 0 0 0.00000
0.2 -0.9 0.1 0.2 0 0.00000
0.2 0.2 -0.8 0.1 0 0.00000
0.2 0.3 0 -0.8 0 0.00000
1 1 1 1 -1 0.00000

mpany for the next period.

0.1 0.1 0.1

0.2 0.3 0.1
0.2 0.2 0
0.1 0.1 0.2
0.2 0.2 0.1
0.3 0 0.2

0.21 0.17 0.11

mmarizes the

Uff (initial state).

trix (transition

q*p
EC1 0,1U +0,2 V+0,4W+0,1X+0,1Y+0,1Z =U
EC2 0,1U+0,2 V+0,1W+0,2X+0,3Y+0,1Z =V
EC3 0,1U+0,3V+0,2W+0,2X+0,2Y+0Z =W
EC4 0,1U+0,3V+0,2W+0,1X+0,1Y+0,2Z =X
EC5 0,3U+0V+0,2W+0,2X+0,2Y+0,1Z =Y
EC6 0,1U + 0,2V+ 0,2W +0,3X +0Y+0,2 Z =Z
EC7 U+V+W+X+Y+Z =1
Problem 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
20% of which will buy Pepsi Cola, 10% that Fanta buys and 30% that Coca Cola consumes; when the buyer currently consum
Colombiana, 20% that Fanta consumes and 30% Coca Cola; if Fanta is currently consumed, the likelihood of it continuing to
Coca Cola. If you currently consume Coca Cola the probability that it will continue to consume is 50%, 20% buy Colombian,

At present, each Colombian brand, Pepsi Cola, Fanta and Coca Cola have the following percentages in market share respecti

COLOMBIANA PEPSI FANTA COCA COLA TOTAL

COLOMBIANA 40% 20% 10% 30% 100%
PEPSI 20% 30% 20% 30% 100%
FANTA 40% 20% 20% 20% 100%
COCA COLA 20% 20% 10% 50% 100%
TOTAL 120% 90% 60% 130% 400%

W 40/100 20/100 10/100 30/100

X q: 20/100 30/100 20/100 30/100 =
Y 40/100 20/100 20/100 20/100
Z 20/100 20/100 10/100 50/100

X3=X,P
0.4 0.2 0.1 0.3
=(0,30 0, 25 0,15 0,30) 0.2 0.3 0.2 0.3
0.4 0.2 0.2 0.2
0.2 0.2 0.1 0.5

= 0.29 0.225 0.14 0.345

P3 0.3 0.25 0.15 0.3

P4 0.29 0.225 0.14 0.345

P5 0.286 0.2225 0.1365 0.355

P6 0.2845 0.22225 0.1359 0.35735

 and Coca Cola when a person has bought Colombian there is a probability that they will continue to consume 40%,
hen the buyer currently consumes Pepsi Cola there is a probability that he will continue to buy 30%, 20% buy
he likelihood of it continuing to be consumed is 20%, 40% buy Colombian, 20% consume Pepsi Cola and 20% go to
me is 50%, 20% buy Colombian, 20% that consumes Pepsi Cola and 10% that is passed to Fanta.

ntages in market share respectively (30%, 25%, 15% and 30%) during week 3.

0.4 0.2 0.1 0.3

0.2 0.3 0.2 0.3
0.4 0.2 0.2 0.2
0.2 0.2 0.1 0.5

0.4 0.2 0.1 0.3

0.2 0.3 0.2 0.3
0.4 0.2 0.2 0.2
0.2 0.2 0.1 0.5
Problem 5. Markov chains (Initial state multiplication):

Suppose you get 6 types of Jeans brands in the Colombian market: Brand 1, Brand 2, Brand
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 0.2 0.16 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 0.21 0.2 0.15 0.2 0.18 0.06
BRAND 5 0.15 0.15 0.15 0.19 0.15 0.21
BRAND 6 0.17 0.16 0.17 0.18 0.19 0.13

At present, brand, have the following percentages in market share respectively (20%, 15%,

U 0.2 0.16 0.15 0.21 0.18 0.1

V 0.14 0.18 0.2 0.19 0.15 0.14
W q: 0.13 0.16 0.15 0.21 0.2 0.15
X 0.21 0.2 0.15 0.2 0.18 0.06
Y 0.15 0.15 0.15 0.19 0.15 0.21
Z 0.17 0.16 0.17 0.18 0.19 0.13

X4=X,P
0.2 0.16 0.15 0.21 0.18 0.1
=(0,20 0, 15 0,17 0,15 0,13 0,20) 0.14 0.18 0.2 0.19 0.15 0.14
0.13 0.16 0.15 0.21 0.2 0.15
0.21 0.2 0.15 0.2 0.18 0.06
0.15 0.15 0.15 0.19 0.15 0.21
0.17 0.16 0.17 0.18 0.19 0.13

= 0.1681 0.1677 0.1615 0.1969 0.177 0.1288

P4 0.2 0.15 0.17 0.15 0.13 0.2

P5 0.1681 0.1677 0.1615 0.1969 0.177 0.1288

P6 0.167888 0.16946 0.160961 0.197273 0.174177 0.130241

P7 0.16792178 0.16953835 0.16107782 0.1972473 0.17421252 0.13000223

P8 0.1679140317 0.16953853 0.16107696 0.19725244 0.17420905 0.13000898

1, Brand 2, Brand 3, Brand 4, Brand 5 and Brand 6. The following table

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

0.2 0.16 0.15 0.21 0.18 0.1

0.14 0.18 0.2 0.19 0.15 0.14
0.13 0.16 0.15 0.21 0.2 0.15
0.21 0.2 0.15 0.2 0.18 0.06
0.15 0.15 0.15 0.19 0.15 0.21
0.17 0.16 0.17 0.18 0.19 0.13