Based on the former EPQ models with partial backlogging, this paper develops an EPQ model with exponential time-varying demand and different productivities. The existence of unique optimal solution is discussed by Mathematica 5.0. A numerical example and sensitivity analysis show that the impact of backlogging parameter on all the costs is greater than that of demand increasing factor and productivity during shortage period, and the impact of backlogging parameter on holding cost, shortage cost and opportunity cost due to lost sale is greater than that on setup cost and total cost.