Question: Based on past experiences, the department store is aware that high price fluctuations / discounts may train the customers to become strategic so that they

Based on past experiences, the department store is aware that high price fluctuations/discounts may train the customers to become strategic so that they deliberately delay their purchase to potentially enjoy a discount. In view of this, the store manager has decided that the price in month 2 cannot be less than 90% of the price in month 1, and the price in month 3 cannot be less than 80% of the price in month 2. With the above additional requirements, how would you decide the optimal pricing policy? There is no need to use the excel solver to solve for the optimal prices; it is enough to just develop the model formulation.

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