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Markov Chain Problem

  1. Mar 4, 2010 #1
    A water distribution company in southern California gets its water supply from the north and sell it back to its customers in Orange county. Assume the following simplified scheme: 3 MG (millions of gallons) of water arrives from the north at the beginning of the month. The company can store up to 4 MG. If it has any excess beyond that, it sells it immediately to another distributor for agricultural usage. The monthly usage in Orange county varies randomly: it is

    1 MG with probability .2
    2 MG ” ” .3
    3 MG ” ” .4
    4 MG ” ” .1

    I need to set up a Markov Chain to model this problem, but I can't think of a way to define the states. Any ideas?
  2. jcsd
  3. Mar 5, 2010 #2
    What are the possible amounts of water the distributor has?
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