A production process contains a machine that deteriorates rapidly in both quality and output under heavy usage, so that it is inspected at the end of each day. Immediately after inspection, the condition of the machine is noted and classified into one of four possible states:

State	Condition
0	Good as new
1	Operable-minimum deterioration
2	Operable-major deterioration
3	Inoperable and replaced by a good as new machine

The process can be modeled as a Markov chain with its (one-step) transition matrix P given by:

State	0	1	2	3
0	0	7/8	1/16	1/16
1	0	3/4	1/8	1/8
2	0	0	1/2	1/2
3	1	0	0	0