each quarter the marketing manager of a
retail store divides the customers into two groups based on their purchase behavior
in the previous quarter. The classes are denoted by L and H. The manager wishes to
determine to which group of customers he should sent a catalog. The cost of sending
a catalog is \$15 per customer. If a customer from group L receives a catalog, then
the expected purchase in the current quarter is a \$20, otherwise it is \$10. If a
customer from group H receives a catalog, then the expected purchase in the current quarter
is \$ 50, otherwise it is \$ 25. Furthermore, if a customer from group L receives a catalog,
then the probablity that he will stay in group L for the next quarter is 0.3, otherwise, it
is 0.5. If a customer from group H receives a catalog, then the probabilty that he will stay
in grooup H for the next quarter is 0.8, otherwise, it is 0.4.
(a.) Formulate an average reward problem to help the manager.

This appears to be a homework question. What does it mean by formulate an average reward problem? Is this a coding challenge? What have you tried so far? Where are you stuck? How can we help?

Be a part of the DaniWeb community

We're a friendly, industry-focused community of 1.21 million developers, IT pros, digital marketers, and technology enthusiasts learning and sharing knowledge.