The Simulate worksheet performs a discrete event simulation of the Markov Chain. Starting from a specified state, the Markov process is simulated for 20 or more steps using a Monte Carlo simulation. The number of steps in the display is set when the worksheet is created. Additional steps can be simulated by clicking on the More button. Charts can be made of the state, state value, cumulative value or discounted value. While all the other worksheets show probability distributions or expected values over collections of realizations, the simulation shows a single realization of the process. The presentation helps illustrate the dynamic nature of a Markov process and the statistical affects of observing the process for a finite number of steps.

The figure shows the first 20 steps of the simulation.