The failure rate of a system is dependent on the operating conditions, environment state, the level of oscillations and vibrations, and the number and severity of random shocks. Shocks and fluctuations can be caused by an external resource or a sudden change in the system situation. Performance of systems or components thereof is affected by degradation or aging due to internal factors or environmental stresses and catastrophic failures due to random shocks or external factors. When the total degradation of a system or a component exceeds a predetermined threshold level, the system is no longer able to operate satisfactorily. This failure is referred to as a soft failure. On the other hand, a hard failure is defined as one that occurs due to fatal shocks. In real systems, there exists a dependency between the degradation process and the sudden shocks or stresses. Degradation makes the system weaker and more susceptible to subsequent shocks. The shocks can, in return, accelerate the degradation process by accumulating damages Furthermore, a dynamic operating environment induces stresses, pressures, in a system that changes the behavior of the system such as deterioration rate, failure mechanisms, physics of failure and etc. Therefore, it is important to investigate the effects of operating environment upon system failure mechanisms and its reliability. If the possible environmental effects are disregarded, it leads to large values of error in system reliability estimation. The present research aims to investigate the performance of a deteriorating multi-unit system subject to random shocks which is operating under a dynamic environment. Two types of random shocks are also considered in the model: critical shocks, that cause instantaneous component failure, and non-critical ones, that increase natural degradation by a random amount. Also, the present study endeavors to develop a new availability model that considers the dependency between shock damage magnitudes and their related inter-arrival times at minimum computation costs.