Dynamic pricing under temperature control for perishable foods

Consumers pay more and more attention to the quality of perishable foods, which is mainly affected by storage temperature. This paper presents a dynamic pricing model for perishable foods under temperature control. To maximize the total profit, the optimal price and storage temperature are obtained using Pontryagin’s maximum principle. A static pricing model is provided to compare with the dynamic one. It is shown by a numerical example that the dynamic policy can make more revenue than the static one. Moreover, the managerial implications are analyzed and the effectiveness of the proposed method is demonstrated.