In this paper, an EPQ model with product reliability is considered. The machine reliability is decreases over time; therefore, the rate of perfect product reduce over time and rate of defective product is increased over time. A fixed percentage of these products are reworked others is waste. The demand for final product constant and the shortage is not allowed and the planning horizon is considered to be infinite. A mathematical model is suggested and the main purpose of this paper is to determine the optimal replenishment and inventory cycle length that corresponds to maximizing the total annual profit. Numerical experiments along with graphical illustrations are carried out to illustrate the behavior of the inventory and show the impact of different parameters on the model. Discussion and conclusions are made at the end of the paper.
