Determining the appropriate inventory control policy and optimal selling price for various items has always been one of the main topics of scientific and industrial researches. In addition, when the goods are deteriorating, due to the specific characteristics of them, determining above cases is more important. Since, perishable products such as dairy products, vegetables etc. lose their quality over time, by implementing static pricing strategy, customers usually gravitate towards fresher products and some inventory become worthless at the end of the sales period. For this reason, implementing dynamic pricing strategy can be used to maximize the sales revenue as well as minimize the waste. According to this, in this thesis, the aim is to obtain dynamic pricing strategy and replenishment cycle for deteriorating items with variable deterioration rate simultaneously while maximizing the total profit per unit time. In most studies that are related to pricing of deteriorating items, it’s assumed that items start to deteriorate from the instant of their arrival in system. While most goods have a span of maintaining quality within which there is no deterioration occurring. After this period which is named fresh product time, deterioration of items occurs. This phenomenon is called non instantaneous deterioration. In this survey non instantaneous deteriorating items are considered which are storable and holding and ordering costs of them are constant. Considering the constant deterioration rate for items that more of them get worthless per unit time during maintenance in storage, is far from reality. For this reason, in this thesis the rate of deterioration is variable and increases in two consecutive periods after beginning of deterioration. Customer demand depends on price and the quantity of the items displayed in the store. After modeling the problem, first optimal pricing strategy has been derived for the given replenishment cycle by using maximum principle. Then, an effective algorithm is designed to obtain the optimal dynamic pricing strategy and replenishment cycle simultaneously. Finally several numerical examples are provided to illustrate the effectiveness of the proposed methods and solution procedure. Furthermore sensitivity analysis of the key system parameters is carried out and some interesting managerial insights are presented. The analytical solution of the optimal dynamic pricing strategy that is obtained in this thesis, can be an important tool for managers in making the pricing and replenishment decisions. Furthermore, the results of the sensitivity analysis of important parameters can provide an overview for managers to control parameters that have significant effects on the overall profit causing better performance of inventory system.