Markov Analysis and Forecasting

Adapted from Heneman, H. G., Judge, T. A., &Kammeyer-Mueller, J. (2012). Staffing Organizations (8th Ed.). New York, NY: McGraw-Hill. ISBN-13: 0077862414. Page 143.

The Doortodoor Sports Equipment Company sells sports clothing and equipment for amateur, light sport (running, tennis, walking, swimming, badminton, golf, etc.) enthusiasts. It is the only company in the nation that does this on a door-to-door basis, seeking to bypass the retail sporting goods store and sell directly to the customer. Its salespeople have sales kits that include both sample products and a full-line catalog they can use to show to and discuss with customers. The sales function is composed of full-time and part-time salespeople (level 1), assistant sales managers (level 2), and regional sales managers (level 3).

The company has decided to study the internal movement patterns of people in the sales function, as well as to forecast their likely availabilities in future time periods. Results will be used to help identify staffing gaps (surpluses and shortages) and to develop staffing strategy and plans for future growth.

To do this, the HR department first collected data for 2010 and 2011 to construct a Transition Probabilities Matrix (below), which also indicates the number of employees for 2012 in each job category. The HR department wanted to use the matrix to forecast availabilities for 2013. The following data were gathered:
Transition Probabilities
(2010 -11 )
Current (2012 )
Job Category Level SF SP ASM RSM Exit No. Employees
Sales, Full-time (SF)
Sales, Part-time (SP)
Asst. Sales Mgr. (ASM)
Region. Sales Mgr. (RSM) 1
3 .50
.00 .10
.00 .05
.00 .00
.70 .35
.30 500

Based on the above data, prepare a paper to address the following:
1. Describe the internal labor market of the company in terms of job stability (staying in same job), promotion paths and rates, transfer paths and rates, demotion paths and rates, and turnover (exit) rates.
2. Forecast the numbers available in each job category in 2013. Identify where there will be shortages and surpluses.
3. Compare and contrast the advantages and disadvantages of internal vs. external recruiting to address the shortages.
4. Indicate potential limitations to your forecasts.

Your paper should be 4 pages in length (excluding cover page and references), double-spaced, and formatted according to the CSU-Global Guide to Writing and APA Requirements. Be sure to discuss and reference concepts taken from the assigned textbook reading and relevant research. You must include a minimum of four credible, academic or professional references beyond the course textbook. Review the grading rubric to see how you will be graded for this assignment.