Nothing is sure in this world except death, then how can surely; a businessman can determine demand for his items. In the classical EOQ models it has been considered that demand is deterministic but in actual practice it is not possible to have a fixed demand therefore it's necessary for us to consider stochastic demand. In this paper, maximum demand is dependent on average yearly demand and prescribed demand function, thus initial inventory level is taken to be maximum demand derived with the

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... elp of demand function and average demand. The concavity of the profit equation has been established and which shows that given model is helpful for finalizing the ordering policy for any supplier/retailer , also different pattern of the given demand function are also considered. In this paper, we have tried to increase the profit of organization by reducing the inventory cost. As shortages are not allowed therefore initial inventory level is equal to the maximum demand level formulated with the given demand function. In this study first time of effect of permissible delay in payments is considered with probabilistic demand. The major draw back of earlier models considering selling price and cost price equal has been removed in this model.