State Reduction - mbits-mirafra/digitalDesignCourse GitHub Wiki
Example:
State Diagram

Step 1:State Assignment
a=000
b=001
c=010
d=011
e=100
f=101
g=110
Step 2: Draw the state Table

Step 3:Eliminate the state if its next state and output are same

From the above table e=g,so eliminate g
Now the state table will be reduced to


From the above table d=f ,So eliminate f
Now the state table will be reduced to

Step 4:Draw the state diagram after reducing the states

Conclusion:
From the above diagram as number of states increases number of flip flop also increases, due to which more space is utilized. To overcome this we can reduce the number of states which reduces the number of flip flops.