Stochastic partial elasticity and its application in inventory management

The concept of stochastic partial elasticity is presented and its operational law is discussed. Under the condition in which out-of-stock is not permitted, partial elasticity of total c ost related to purchase quantity and period is studied. The general expression of joint probability density of total cost is given. The example shows that elasticity distribution of total cost is defined completely, when the distribution characteristics of purchase quantity and period are known.