In this paper, an inventory model is developed for deteriorating items with stock-dependent demand,
permitting shortages and time-proportional backlogging rate. In particular, the backlogging rate is considered
to be a decreasing function of the waiting time for the next replenishment. This assumption is more
realistic. In practice, we can observe periodically the proportion of demand which would accept backlogging
and the corresponding waiting time for the next replenishment. Then the statistical techniques, such
as the nonlinear regression method, can be used to estimate the backlogging rate. The analytical formulations
of the problem on the general framework described have been given. The condition which guarantees
the unique solution is obtained and the complete proof of corresponding second-order sufficient
conditions for optimum is also provided.