Course Title: Stochastic Processes and Applications

Part A: Course Overview

Course Title: Stochastic Processes and Applications

Credit Points: 12.00

Course Code




Learning Mode

Teaching Period(s)


City Campus


145H Mathematical & Geospatial Sciences


Sem 2 2006,
Sem 1 2010,
Sem 2 2013,
Sem 1 2015

Course Coordinator: Dr Stelios Georgiou

Course Coordinator Phone: +61 3 9925 3158

Course Coordinator Email:

Course Coordinator Location: 8.9.74

Pre-requisite Courses and Assumed Knowledge and Capabilities

Basic knowledge of mathematical modelling and probability theory.

Course Description

Stochastic models are among the most widely used tools in operations research and management science. Stochastic processes and applications can be used to analyse and solve a diverse range of problems arising in production & inventory control, resource planning, service systems, computer networks and many others. This course, with an emphasis on model building, covers inventory models, Markov chains, Poisson processes and queuing theory.

Objectives/Learning Outcomes/Capability Development

This course contributes to the following Program Learning Outcomes for MC004 Master of Statistics and Operations Research and MC242 Master of Analytics:

Knowledge and technical competence

  • an understanding of appropriate and relevant, fundamental and applied mathematical knowledge, methodologies and modern computational tools.


  • the ability to bring together and flexibly apply knowledge to characterise, analyse and solve a wide range of problems
  • an understanding of the relationship between the purpose of a model and the appropriate level of complexity and accuracy.

Information literacy

  • the ability to locate and use data and information and evaluate its quality with respect to its authority and relevance.

On completion of this course you should be able to:

  1. Elucidate the power of stochastic processes and their range of applications;
  2. Demonstrate essential stochastic modelling tools including Markov chains and queuing theory;
  3. Formulate and solve problems which involve setting up stochastic models

Overview of Learning Activities

The objectives of this course are best learnt through lectures and class exercises. After a brief review of probability theory and mathematical modelling, the topics of decision making under uncertainty, inventory models, Poisson processes, Markov chains and queuing theory will be covered in detail during lectures. While attendance at lectures is not compulsory, you will find that regular attendance is necessary as lectures will be important aspects of the learning experience.

The course is supported by the Blackboard learning system. Assessment comprises class exercises, a test and an exam. 


Overview of Learning Resources

Some basic lecture notes for this course will be available on Blackboard. A recommended reading list will also be provided.

Library Subject Guide for Mathematics & Statistics

Overview of Assessment

Note that:

☒This course has no hurdle requirements.

Assessment Tasks:

Assessment Task 1:  Class Exercises
Weighting 25%
This assessment task supports CLOs 1,2 & 3

Assessment Task 2: Mid Semester Test
Weighting 25%
This assessment task supports CLO 1,2 &3

Assessment Task 3: Final Exam
Weighting 50% 
This assessment supports CLO 1,2 & 3