Providing service to an intermediate market

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Logistics provides services to three types of markets: Low, Intermediate and High. Each category refers to a construct of several key variables that makes the market competitively desirable. During a given year, there is a 0.25 probability that a Low market will change to an Intermediate market and a 0.05 probability that Logistics will stop providing service to the market (is no longer competitive to develop the market.) Also, there is a 0.15 probability that an Intermediate market evolve to a High market and a 0.10 probability that Logistics will stop providing service to this market. There is a 0.05 probability that Logistics will stop providing service to a High market. For the time-frame of this study, once a market has reached a higher category, it won't fall back to a lower category. What is the probability that Logistics will stop providing service to an Intermediate market before becoming a High market?

Reference no: EM1390752

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