Price per connector:

$-$ The price per electronic connector is $$3\mathrm{.}00$

$-$ Expect a price inflation factor of $2\mathrm{.}5\%$ per year $($for the next $10$ years$)$

$-$ The customer is asking for a quantity discount if the quantity ordered is in excess of $500,000$ units

Quantity Demand:

$-$ The customer has indicated that the first$-$year orders will be around $1,000,000$ units. $($looking for quantity discount$)$

$-$ The customer feels that after the first $500,000$ units are ordered, there will be a price discount of $10\%$ on all purchases.

$-$ The customer has also indicated that if the product works as suspected, they will order an additional $2\mathrm{.}5\%$ each year for the next $10$ years.

Fixed Cost $($Overhead$)$

$-$ The fixed overhead for this project would initially be $$500,000,$ and that will hold until the number of units produced exceeds $1,400,000.$

$-$ Above $1,400,000$ units $=>$ need an additional fixed cost of $$100,000$

$-$ Fixed costs will increase $2\mathrm{.}5\%($inflation rate$)$ in $10$ years