The contents of a reservoir depend on the available rainfall in the region and the demands on

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The contents of a reservoir depend on the available rainfall in the region and the demands on the water supply. Suppose that a reservoir holds up to 4 units of water (a unit might be a million gallons), and policy for the use of the water for irrigation and drinking water never allows the contents of the reservoir to drop below 1 unit of water. The (rounded) amount of water in the reservoir from week to week seems to follow the transition matrix
4 1[.20 .10 .05 .05 2 30 .20 .20 30 .40 .40 .50 40 4 L.10 30 25 25

(a) Determine and interpret the stable distribution for the matrix.
(b) Suppose that the weekly benefits to recreation in the area around the reservoir are estimated to be $4000 when there is 1 unit in the reservoir, $6000 when there are 2 units in the reservoir, $10,000 when there are 3 units, and $3000 when there are 4 units. Determine the average weekly benefits to be realized in the long run?

Distribution
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Finite Mathematics and Its Applications

ISBN: 978-0134768632

12th edition

Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair

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