In this paper, the inventory models assumed that the production rate of a manufacturing system is often assumed to be constant, but in fact production rate is a variable under managerial control. Production rate may be influenced due to demand, on hand inventory and launching new competitive product or with the change in customer’s preferences. A great number of authors have studied problems connected with constant production rate by taking different deterioration and demand rate. But when a new product is launched in the super market, demand increases more rapidly as time progresses. Thus it is quite realistic approach to the model that the demand rate is taken to exponential increasing function of time. In the present paper an attempt has been made to study a more realistic situation, for assuming that production rate is demand dependent.