Markov analysis

Definition

Statistical technique used in forecasting the future behavior of a variable or system whose current state or behavior does not depend on its state or behavior at any time in the past in other words, it is random. For example, in the flipping of a coin, the probability of a flip coming up heads is the same regardless of whether the previous result was heads or tails. In accounting, Markov analysis is used in estimating bad debt or uncollectible accounts receivable. In marketing, it is used in modeling future brand loyalty of consumers based on their current rate of purchases and repurchases. In quality control, Markov analysis is applicable to common-cause problems and other sequence dependent events, and can handle system degradation. Named after its inventor, the Russian mathematician and a probability theory pioneer, Andrei Andreevich Markov (1856-1922).