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PostPosted: Sun Nov 11, 2012 6:15 am 

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Bloodredshadow wrote:
For this illustration I will use a comparison between a single 10 million ft. site and an equivalent number of 1 million ft. sites as these sizes were what I used real data to experiment with.Output of a 1 million ft. site at 13% efficiency : 162,716,627 units/day (reasonable site)Output of a 10 million ft. site at 10.5% efficiency: 1,307,739,969 units/day (absurd site)



I just made a bunch of 1 million sq ft mines of all the raw materials and your data holds up very well. They are all competitive, some much more than others. I'm using my own high QA tools which didn't cost as much as purchasing them, even allowing for this, the mines will all turn a good profit (except wood, clay and perhaps water). 1 million sq ft wood, clay and water mines are still profitable just not as much.

I wanted to say thanks because after reading this I was convinced you were correct. I was one of the people who thought that somewhere between 1 and 10 million sq ft mines couldn't compete with IMU prices. I didn't "do the math", so to speak...you did though, and did it well. I like to estimate/guesstimate in games and things that usually don't matter much. To me estimation is a valuable skill that I enjoy and am usually rather good at. I "do the math" when I have to, when it's needed or important. Simunomics is full of mathematical possibilities and ploughing thru most of it with estimation is fun for me. This matters though, thanks.

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PostPosted: Sun Nov 11, 2012 3:18 pm 

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One part of the math that sometimes gets missed in raw materials is the fact that raw materials have a limited market. You can't sell them directly in stores, and so someone must have a factory that uses the output of what is being produced, or it will just pile up in your warehouse or on the market.

Thus, if a lot of people make very large mines, it won't take long to have a years worth of supply of some raw materials, especially of high QA clay, which is used very little in the game. You should be okay finding a market for high QA water at a decent price, but the demand for some raw materials is much more limited than it is for others.


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PostPosted: Mon Nov 12, 2012 5:00 am 

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As far as analysis for bricks goes, we can use the following analysis.

I am going to use general numbers, because right now I don't have access to most of my spreadsheets. These general numbers give a feel for a result that I know you won't like, professor :).

If someone expands a factory from 100kft2 to 150kft2 in a 0% economy, it costs about 1 billion, and, in the end, they can sell the factory for about 2 billion more. Generally, 40k/ft2 is a good starting place for a factory, although I see a lot of factories of 150kft2 going for more like 45k-55k/ft2. If we use 40k, you are getting a fair estimate, based on market prices for factories of that size.

Regardless, 1 billion profit in a 0% economy over 21 days = 47.61 million per day.

If we take 25 million per day + .4% of the value of the 100kft2 factory per day, that comes out to be (taking the value of the factory as 4 billion) 41 million per day. Both of these values are fairly close, but lets use the smaller one, because it probably more accurately estimates the price of the building by your model (although your model doesn't really represent market prices for this size building).

A 100kft2 factory makes about 221k bricks per day, using r50 R&D for speed.

41 million / 221k = 185.50 profit required per brick.

The raw cost of the factory is 8.75m/221k = 39.60

That means without the cost of inputs (that is to say, if clay and water both cost 0) the price of bricks would be 225, or around 225, which is around the range I estimated. Remember, this assumes clay and water to be worth nothing.

If we take the massive negative economy like Canjara, the owner would actually make a lot more profit expanding, because the cost of expansion would only be 500m, rather than 1b. That works out to increase profitability by 50%, but the low economy doesn't increase the speed at which employees produce by 50%, or even close to it.

If we take estimates for the negative economy, I figured the price to be around 300. I don't think that is fair, but I wouldn't be surprised if the price settles a little higher than 250.

You could buy a huge clay mine and just bank qa0 clay, but here is the problem with that. Right now, you are achieving a good level of profit with wood by selling at 110. But clay produces at ten times the rate, so I can automatically say that you will only be able to achieve the same level of profit selling for around 11. That is lower than the current market price, but it would still allow price of bricks to be increased by at least 27 from the 225 figure, landing just around 250.

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PostPosted: Mon Nov 12, 2012 6:22 am 

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Does anyone in the game actually have QA50 for bricks? If not, the situation might even be worse than the numbers you gave. However, I am not yet completely convinced. I guess I need to run the numbers myself. Something feels off.


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PostPosted: Mon Nov 12, 2012 6:45 am 

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Professor wrote:
One part of the math that sometimes gets missed in raw materials is the fact that raw materials have a limited market. You can't sell them directly in stores, and so someone must have a factory that uses the output of what is being produced, or it will just pile up in your warehouse or on the market.

Thus, if a lot of people make very large mines, it won't take long to have a years worth of supply of some raw materials, especially of high QA clay, which is used very little in the game. You should be okay finding a market for high QA water at a decent price, but the demand for some raw materials is much more limited than it is for others.


Indeed I agree with every part of that. I definitely am not suggesting this for a general guide to raw materials profitability, I think any model that assumes being able to sell all marginal output is disqualified from that role. I am aiming for more specific situations like having enough demand through invoices or consistent market sales to equal the amount of production that a larger mine can output, but then having to make the decision between taking up multiple land sites for smaller mines vs. one land slot for a much larger mine. Especially when to clear those land sites might involve selling other producing assets.


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PostPosted: Mon Nov 12, 2012 8:51 am 

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True enough. I am quite aware that the raw materials might already be slightly overlsupplied, but so are the extraction tools. The demand for 80-90 QA tools isn't there for 350K tools a day, so I am using them in 1 million sq ft mines. 36 mines at approx. average value of :beta: 4.5 billion each.

Since the economy of Canjara is -60%, when it reaches 0% (matter of time), my warehouse will be overflowing will high QA raw materials. I will start to consider selling my mines at 50% profit (-10% for the extracted materials). I expect to clear :beta: 150 to :beta: 200 billion in profit. Perhaps in 2 months or 6 months maybe even a year...doesn't matter. Ok, so there's my math estimate. The losses I took upfront will more than be covered from sales of raw materials. It took me two hours to do, but it was an idea I've already had for months.

Don't worry about me, I know what I'm doing. :cool:

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PostPosted: Mon Nov 12, 2012 5:31 pm 

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Jimmi wrote:
True enough. I am quite aware that the raw materials might already be slightly oversupplied, but so are the extraction tools. The demand for 80-90 QA tools isn't there for 350K tools a day


Are you sure about that? Demand is not there? There are hardly any tools on the market of high QA, and when I post some or see some for sale they don't last long unless the price is very high.

I rarely see tools from either you or Boston on the market. Someone must be buying them or both of you are just not selling them. At my price of 12999.99, I have intentionally priced my QA100 tools at a high enough price to leave room for competition. Boston has stated that his price is 9999.99 for QA90 tools, so that is 300 per QA higher price for my tools, which should be enough of a difference that some people will prefer to use the QA90 tools from Boston instead of my tools.

If you use that same 300 per QA, then you should be able to sell a lot of QA80 tools at 6999.99 price, or even if you use a smaller difference of say 200 per QA, then you should be able to sell a reasonable volume of QA80 tools at 7999.99 price.

It seems like you have given up on the idea of selling your tools, and that is not necessary to do. You won't sell QA80 tools for the same price as someone else is selling QA90 tools or QA100 tools, but you can still get much higher than IMU prices would suggest should be charged for tools. IMU prices suggest that tools of QA80 should sell for 7280.25, and I am fairly confident that if you start offering your QA80 tools on the market at that price, you will have people wanting to buy.


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PostPosted: Tue Nov 13, 2012 8:56 pm 

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Professor wrote:
Are you sure about that? Demand is not there? There are hardly any tools on the market of high QA, and when I post some or see some for sale they don't last long unless the price is very high.


Well Professor, I certainly intend to expand my production of extraction tools. In fact my mines seem to be consuming more tools than my own current production, so short term I may be in need of purchasing ext. tools, though I would probably be buying lower QA tools.

I did have 1-2 million 60-90 QA extraction tools sitting on the market for 2-3 weeks with a fair amount of sales. Perhaps my market prices were a little too high, however I had no desire to initiate an extraction tool price scrimmage with you or any of the other current producers, at least not so early after the update that gave us the extraction tool. Are you not the largest producer of high QA tools in Simunomics Professor?

I do intend to produce more ext. tools at higher QA in the future, most of which I would like to place for sale on all the cities markets. But that is more of a long term goal. Thanks,
Jimmi

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PostPosted: Wed Nov 14, 2012 12:44 am 

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Yes, I do believe that I am the largest producer of tools in the game.

I don't want to have a price war with you if you wish to sell your tools, however.

I have intentionally selected a price that is high enough to allow Boston IMU at 9999.99 for QA90 tools and other companies with lower price for lower QA tools to continue selling. I do not want to force the community to only buy tools from me. I offer the highest QA tools, and plan to continue to do so, but I don't intend for that to stop others from selling their tools.

At 300 per QA price premium versus the next highest QA tools in the market, my goal was to be a reasonable seller of tols for smaller raw materials producers who are using mines that are 300k sq ft in size and smaller. At about 300k sq ft size, it makes more sense to pay less and buy tools that are QA90 or lower quality, if you are assuming IMU selling prices.

My initial estimates of the volume of tools that I would be selling were very far off, and I ended up not being able to meet all the demand from customers during my first few weeks of selling tools. I had to convert a lot of factories over to tools and increase production of tools in order to meet demand. Now, I am barely able to meet market demands for invoices, but I don't have any tools left over to sell in the market right now, as everything I make goes out in invoices as soon as it is produced.

My guess is that if you really wanted to sell tools in the market, and you price competitively with my price of 12999 for QA100 and Boston's price of 9999 for QA90, you would have buyers. Just don't expect to sell QA80 tools for 15,999 price.


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PostPosted: Sat Dec 22, 2012 8:37 am 

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Jimmi wrote:
True enough. I am quite aware that the raw materials might already be slightly overlsupplied, but so are the extraction tools. The demand for 80-90 QA tools isn't there for 350K tools a day, so I am using them in 1 million sq ft mines. 36 mines at approx. average value of :beta: 4.5 billion each.

Since the economy of Canjara is -60%, when it reaches 0% (matter of time), my warehouse will be overflowing will high QA raw materials. I will start to consider selling my mines at 50% profit (-10% for the extracted materials). I expect to clear :beta: 150 to :beta: 200 billion in profit. Perhaps in 2 months or 6 months maybe even a year...doesn't matter. Ok, so there's my math estimate. The losses I took upfront will more than be covered from sales of raw materials. It took me two hours to do, but it was an idea I've already had for months.

Don't worry about me, I know what I'm doing. :cool:



My estimate was a bit off, but then I did make a lot of adjustments and moves along the way. Time wise it has only been 5-6 weeks for Canjara to reach over 100% economy, which I think surprised everyone. Here is an estimate of actual realized earnings:

500 Billion Bucks
-50 Billion (10% Loss on resale)
450 Billion Bucks
-50 Billion (Approx. Interest on loans)
400 Billion Bucks
+20 Billion (Est. Profit From Raw Material Sales)
-------------------
420,000,000,000.00 Bucks Profit (Taxable Earnings)

Jimmi CEO Star Extraction

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