Joe Isley,the Owner of Big I HiFi,believes That the Store's

question 3

Essay

Joe Isley,the owner of Big I HiFi,believes that the store's inventory can be modeled as a Markov process.If items are either classified as in stock,out of stock,discontinued from stock or put on clearance sale,then the following transition matrix has been estimated:
a. Rewrite the transition matrix for the problem in the form of I, O, R, and Q submatrices.
b. Compute the fundamental matrix for this problem.
c. What is the probability of an item currently in stock being out of stock in two months?
d. What is the probability of an item currently out of stock eventually being discontinued from stock?

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Definitions:

Payment Date

The specific date on which dividends are actually paid out to shareholders or when a debt obligation must be repaid.

Controlling Influence

The power to govern the financial and operating policies of another entity through ownership, contract, or otherwise, often resulting in a parent-subsidiary relationship.

Parent

A company that controls other companies (subsidiaries) through ownership of more than half their voting stock or by having a significant influence over them.

Equity Method Investments

An accounting technique used to record investments in which the investor has significant influence over the investee but does not control it outright, typically through the ownership of 20% to 50% of the voting stock.