Application of Decision Calculus in Allocation of

Application of Decision Calculus in Allocation of

Marketing Budgets Based on Markov Chains

H.R. Koosha & A. Albadvi

**

Hamidreza Koosha Assistant Professor, Ferdowsi University of Mashhad, Iran, [email protected]

Amir Albadvi, Professor, Tarbiat Modares University, Iran, [email protected]

Keywords 1 ABSTRACT

Decision Calculus (DC) is a judgment-based approach which

considers managers’ opinion in formulation of real world situations.

In DC, manager’ mind and the model are aggregated to each other.

Little in 1970 introduced the philosophy of decision calculus and it

has been used widely in formulation of problems in marketing. The

main purpose of this paper is to provide an application for DC in

allocation of marketing budgets as a critical activity in marketing. In

case of data availability and environmental complexity, researchers

suggest the use of mixed models to face such situations to allocate

marketing budgets. Mixed models are models which use all the data

from the past and managers’ judgment altogether to provide more

effective models. In this paper we suggest a simple mixed model.

Then we provide a more complex model based on DC and Markov

Chains Models (MCM). The suggested models are predicted to be

effective in better decision making on allocation of customer

relationship budgets.

© 2014 IUST Publication, IJIEPM. Vol. 25, No. 1, All Rights Reserved

**

Corresponding author. Amir Albadvi Email: [email protected]

May 2014, Volume 25, Number 1

pppp.. 110099--112222

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Decision Calculus (DC),

Customer relationship budgets,

Management judgment,

Markov chain,

Transition matrix,

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‌هاي‌ماركوف‌زنجيره‌**امير‌البدوي‌وحميدرضا‌کوشا‌

‌‌چکيده:‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌يکلمات‌کليد

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‌1.‌مقدمه1

‌33/6/13تاريخ‌وصول:‌‌15/4/11تاريخ‌تصويب:‌

‌کوشا، حميدرضا[email protected]

‌مسئول‌ دکتر‌مقاله:نويسنده[email protected]

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Application of Decision Calculus in Allocation of