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This section begins with a listing of the Notations used.

S = Highest Stock stage.

f (d) = Probability density characteristic of Demand.

D = Deterioration.

Q = Optimum production order amount.

CS = Shortage price. CH = Holding Price per unit per unit of duration held in Stock. Q* = Back ordering is permitted. I = units per year C = Unit price for producing or purchasing every unit, TEC₁ (Q) = Optimum Inventory achieve local minimum. TEC₁ (I)= Expected price. TEC (Q*) = Conditional for Ordering.