In this paper, we continue our study of embedded Markoff Chain Models of Cumulative Damage. We introduce and discuss a time transformation that leads to a condensation method. This method appears to be unusally comprehensive and a practical way to study nonstationary models of cummulative damage. Further, it allows us to estimate the desired nonstationary transition matrices providing a means of gaining further insights into the cumulative damage process. Examples are presented and further directions of research are indicated.

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