Question

14-11 Draw a tree diagram to illustrate what the market shares would be next month for Problem 14-10.

14-10

14-10 Over any given month, Dress-Rite loses 10% of its customers to Fashion, Inc., and 20% of its market to Luxury Living. But Fashion, Inc., loses 5% of its market to Dress-Rite and 10% of its market to Luxury Living each month; and Luxury Living loses 5% of its market to Fashion, Inc., and 5% of its market to Dress-Rite. At the present time, each of these clothing stores has an equal share of the market. What do you think the market shares will be next month? What will they be in 3 months?

	Dress Rite	Fashin Inc	Lux Living
current month share	33.33	33.33	33.33
Next Month loss in mkt share (%)
- to Fashin Inc	10%	0%	5%
- lux inc	20%	10%	0%
- dress rite	0%	5%	5%
Next Month loss in market share (absolute vlaue)
- to Fashin Inc	3.333	0	1.6665
- lux inc	6.666	3.333	0
- dress rite	0	1.6665	1.6665
End of month 1 total share	26.664	33.33	39.996
Month 2 loss in mkt share (%)
- to Fashin Inc	10%	0%	5%
- lux inc	20%	10%	0%
- dress rite	0%	5%	5%
Month 2 loss in market share (absolute vlaue)
- to Fashin Inc	2.6664	0	1.9998
- lux inc	5.3328	3.333	0
- dress rite	0	1.6665	1.9998
End of month 2 total share	22.3311	32.9967	44.6622
Month 3 loss in mkt share (%)
- to Fashin Inc	10%	0%	5%
- lux inc	20%	10%	0%
- dress rite	0%	5%	5%
Month 3 loss in market share (absolute vlaue)
- to Fashin Inc	2.23311	0	2.23311
- lux inc	4.46622	3.29967	0
- dress rite	0	1.649835	2.23311
End of month 2 total share	19.514715	32.513415	47.96187

Answer 1

I have done this type of questions some days ago,so that I am pretty sure about my answer.

If you have any queries regarding this,you can ask me.

Thank you so much sir