This is paper investigates policy of optimal ordering policy in an inventory control system under the effect of time value of money inflation rate on inventory at store and production consideration

This is paper investigates policy of optimal ordering policy in an inventory control system under the effect of 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 characteristics at the same time by determine the optimal quantity, optimal total cost of lot size. 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 modelled first, here solution procedure is proposed to derive the optimal order quantity, the number of replenishment during the planning horizon with two cases for optimal economic order quantity as feasible and infeasible value. Finally represented the economic order quantity versus the deterioration and break-ability rates for the real data of eggs in stock of sample industry which is selected randomly form eggs industry at 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.

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