For a mobile multihop relay (MMR) system, a centralised packet scheduling method is compared with a distributed packet scheduling method. The performance of the MMR system considering the joint effect of a finite-length queue and an adaptive modulation and coding scheme for base station and relay station is analysed. A finite state Markov chain (FSMC) describing the queue and channel state pairs’ transitions for the MMR system is built. Moreover, a method of reducing the state space of the FSMC, which enables a hop-by-hop performance analysis of the MMR system without explosive growth in the number of states, is presented. Numerical and simulation results show that the proposed FSMC modelling is accurate and the performance of centralised scheduling becomes degraded because of increased mismatches between a scheduled modulation and coding scheme (MCS) level and the actual MCS level.