Industry Management

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raybaudi
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Industry Management

#1 Post by raybaudi » Nov 25 2015

With the help of some spreadsheets, I did some math and would certainly appreciate if you could help me find any mistakes, because I've realized there's a point where even though the market price allows for a positive markup on commodities production, it is better to import, provided initial funding required by the project.

Now, let's take, for example a Coal Mine.

*Built around 1940.
*Built in non-loyal territory (as most of valuable raw materials are usually extracted from)
*Hex supply of 50-60% (to prevent taking into account the building costs of supply centers and airports)
*Built entirely to supply industry consumption, not domestic market.

Max yearly possible output: 2,286,561 [ton]
Estimated output under given assumptions: 40% * 2,286,561 [ton] = 914,744 [ton] => 2,506 [ton / day]

Market Price = 28 [ USD / ton ]
Production Cost = 22 [ USD / ton ] (I have yet to know if for CONS GOODS or IND GOODS this
Production cost includes Raw Materials purchase)

In any day, once the Coal is running you will have:

INCOMES = 2,506 [ton / day] * 28 [USD / ton] = 70,168 [USD]
EXPENSES = 2,506 [ton / day] * 22 [USD / ton] = 55,132 [USD]

Gross Profit = 15,037 [USD]

Cool, we're making a daily profit IF ONLY we do not take into account initial investment (oh, those fundraisers and stocks holders)

In order to build a Coal Mine, we need an Industrial Complex + the mine itself.

INDUSTRIAL COMPLEX costs

Fixed Costs = 8,450,000 [USD]
Variable Costs =
Industry Goods = 5,000 [ton] * 3,563 [USD / ton] = 17,815,000 [USD]

Total Costs = 8,450,000 + 17,815,000 [USD] = 26,265,000 [USD]

COAL MINE costs

Fixed Costs = 27,050,000 [USD]
Variable Costs =
Industry Goods = 17,095 [ton] * 3,563 [USD / ton ] = 60,909,485 [USD]

Total Costs = 27,050,000 [USD] + 60,909,485 [USD] = 87,959,485

Industry Complex + Coal Mine Total Initial Investment = 114,224,485 [USD]

Now, imagining that we do not have to pay for yearly Manteinance costs, we should continue our cash flow.

If we make a daily Gross Profit of 15,037 [USD], we would need 7596 [days] for return of investment, which translates into roughly 20-21 [years]!! (now consider, real life mines have a life span of 10-15 years)

And I haven't considered taxes collection to our industry (I don't know if it's simulated in this case).

So, are these calculations OK?

Besides, if the Production Costs do not include Raw Materials purchase, then the markup is lower and therefore return of investment increases.

Regards,

dax1
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Re: Industry Management

#2 Post by dax1 » Nov 26 2015

1) I don't understand why you want produce where you have penalty!
2) If you install 2 coal mine the industral complex cost divided for 2; with 3 coal mine divided for 3 and so on untill 6.
3) in my game I trade with other country and try to sell over the market price
Con forza ed ardimento

mattpilot
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Re: Industry Management

#3 Post by mattpilot » Nov 29 2015

I agree with dax1's #2 point - probably be wise if you built more mines - though i bet you'll be restricted to 2 or 3 max.

Here's my beef:

Even though we successfully lobbied BG to make non-loyal territory penalty affected by approval rating, it seems near impossible to get anywhere near the 100% efficiency mark in DAR (i believe it was 75% DAR?). I now play with no loyalty penalties, because it makes no sense, for maximum efficiency and given the number of empty loyal hexes i have, to not build in loyal territory. I mean the workers don't seem to mind commuting for hours across the empire ...

I kind of wish local population (we have since a nice overlay) would somehow factor into everything -> "people" need work. Maybe something like increased revolt risk is if no production facilities nearby. I dunno - Something's missing though.

raybaudi
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Re: Industry Management

#4 Post by raybaudi » Nov 29 2015

Thank you both for your answers.

As coalfields seem abundant, we better have a look at Oil and Rubber. You'd normally find these in foreign lands. That's why the example assumes extraction at non-loyal territory. Besides, as mattpilot cleverly pointed out, a hex allowing extraction facilities in the numbers of 3+ are a rare finding.

Definitively, I'd go for canceling loyalty effects.

Could you please enlighten me a little further? Which other effects does loyalty has except for productivity and line of sight? If it impacts Partisan/Guerrilla spawning, I'd have to review the choice again...I believe the latter represents a nice addition to gameplay.

Thank you,

Best Regards,

mattpilot
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Re: Industry Management

#5 Post by mattpilot » Nov 29 2015

I'm not entirely sure - i believe line of sight penalties are part of it. Can't access the game at the moment. Not sure if partisans play a role in it

But i'd like to add something to the loyalty penalties -> i feel like there is a "double penalty" that doesn't make sense. I speak of the supply penalty, of course. Conquered territory is most likely not as well supplied as the area around your capital. Of course you can build this supply up with infastructure, and that should be the objective. But Lets say you have a 50% supply penalty in a far off mine in addition to the loyalty penalty?

Only reason to build in captured territory now is to get resources you can't get in your own - but there is no sense in building factories there. Before turning off loyalty penalties, i used to scrap every industry in the conquered territory and rebuild what i needed in my own territory - sounds silly, doesn't it? Since you got those spreadsheet skills, mind doing some math? ;-) Whats the return on investment on scrapping a, say... industrial plant in a 50% supplied area in non loyal territory and rebuilding it in a 100% supplied loyal territory ?

mikeownage
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Re: Industry Management

#6 Post by mikeownage » Dec 17 2015

Before they added the feature to turn of the loyalty penalty I just created my own building that produce the raw resources without actually needing a resource hex by editing the unit file for the specific sandbox I wanted to play.

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