Applications of Finite Markov Chain Models to Management

Markov Chains offer ideal conditions for the study and mathematical modelling of a certain kind of situations depending on random variables. The basic concepts of the corresponding theory were introduced by Markov in 1907 on coding literary texts. Since then, the Markov Chain theory was developerd by a number of leading mathematicians, such as Kolmogorov, Feller etc. However, only from the 1960's the importance of this theory to the Natural, Social and most of the other Applied Sciences has been recognized. In this review paper we present applications of finite Markov Chains to management problems, which can be solved, as most of the problems concerning applications of Markov chains in general do, by distinguishing between two types of Chains, the Ergodic and the Absorbing ones.

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