Steady state condition, Managerial Accounting

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Steady state condition

In many cases, the Markov process will converge to a steady state or equilibrium.

In general, as number of transitions `n' increase, the state values tend to stabilize at steady state. This is a logical occurrence, since the present state tends to lose significance.

Steady State vector:

A steady vector is given in terms of decimal proportions as

2038_formula.jpg

Subject to X + Y + Z = 1

i.e. once a steady state is arrived at, multiplication of a state condition by the transition probabilities does not change its state condition.

 


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