The Research Of Markov Chain Theory And Its Applications In The Field Of Economic Management

Markov chain is an extensively applied stochastic process model which is to quantitatively analysis a system transfering from one state to another, many dynamic systematic problems in the economic and social phenomenon can be described by Markov chain. The paper first introduces several basic methods of markov chain and some more important branches of Markov chain especially the birth-death process issue and its structure. The main body of the paper is to analysis the stochastic mathematic model applied in the economic and management field which is based on the transition probability ,the "Markov property" test of random variable series, the Markov chain prediction method based on absolute distribution and the Markov chain prediction method based on probability summation. Through the practice, it has been proven that the model is practical and can be applied in the economic and management field, which can optimize the long-term benefit.The paper also discusses 4 kinds of the state classification methods in the application and the calculation steps of the classical prediction method of Markov chain and summarizes several unresolved problems of Markov chain and the research findings of these problems. The paper also analyses several examples of the application of the Markov chain in the economic and management field, the differences of the predication methods of the Markov chain and other quantitative analysis method, and some problems and shortcomings in the application. The resolutions are also discussed in the paper.Finally, the paper gives some proposals to perfect the Markov chain, which are Weighted Markov chain, Grey Markov chain, Hidden Markov model, and discusses the superiority and some problems to be reformed in the application of the Markov chain in the economic and management field.