In this work, we study an unreliable production system that produces a particular product subject to sudden obsolescence. The purpose of our work is to determine the optimal lot size that minimizes the total expected cost during product lifetime considering machine breakdowns and repair time. The numerical results show that failure rate, mean repair time, and obsolescence cost have significant impact on the optimal lot size. The managerial insight obtained by this research can support the manager in making decision concerning the production lot size more properly.