This paper presents an EMQ model which determines an optimal production cycle and inspection schedules simultaneously in a deteriorating machine. It is assumed that a machine is subject to a random deterioration from an in-control state to an out-of-control state and thus producing some proportion of defective items. Optimal solutions and minimum average cost as well as some unique properties are derived. Numerical experiments are carried out to examine the behavior of the proposed model and compare the proposed model to the existing models. Several mistakes in the previous research are found and discussed.