This is paper developed the policy of EOQ in an inventory control system under the effect of the time value of money inflation rate on inventory at store and production consideration.
The proposed an economic order quantity model to manage deteriorating and break-ability rates for items which have both risks as break-ability and deterioration in stock by obtaining the optimal quantity, optimal total cost of lot size if break-ability risk or deteriorating risk is occurring once of them of both of them. The finite horizon planning, the demand, production rate and deterioration break-ability rates are constant. The present value of total cost during the planning horizon in this inventory system is modeled first; here solution procedure is proposed to derive the total cost with respect to the order quantity, the number of replenishment during the planning horizon with two cases for optimal economic order quantity based on the. Finally represented the EOQ versus the deterioration and break-ability rates for the real data of eggs in the stock of sample industry which is selected randomly form eggs industry in the Republic of Yemen.
Sensitivity analysis for the proposed data was suggested the accepted range of the net constant rate of inflation to achieved optimal total cost under economic order quantity, discussing the goodness of proposed model under several values of deterioration, break-ability rates and representing the net constant discount rate of inflation. Rates and representing the net constant discount rate of inflation.