In order to describe this scenario more appropriately, the continuously reviewed Economic Production Quantity (EPQ) model is considered in this research work. This paper addresses the situation where a perishable (deteriorated) product is manufactured and consumed simultaneously, the demand of this product is stable over the time, machine that produce the product also face random failure and the time to repair this machine is also uncertain. In this situation, efficient management of inventory & production is crucial. In addition, during production the process has to go through some natural phenomena like random breakdown of machine, deterioration of product over time, uncertainty in repair time that eventually create the possibility of shortage.
In order to manage the integrated production inventory system economically it is necessary to identify the optimal production time and the optimal production reorder point that either maximize the profit or minimize the cost. In a continuous manufacturing environment where production and consumption occur simultaneously, one of the biggest challenges is the efficient management of production and inventory system.
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