Profitability in the car market

[Guest]

You completely agreed? Souds my words worked.

I assumed that somebody will tell the poster: To sell the cars for 50K is totally right, if you product all the materials yourself, since 50K-28K>0, your company was still improving with time.

Don't you feel the logic is quite familiar?

If you thought that would be my response, then you definitely never understood my intentions. Maybe you didn't read my posts carefully enough, but from the beginning I argued that the only difference between us was a matter of definition, not action. I was defining profit over a series of steps while you defined profit for a single step. Neither is wrong, you just have to know what you are evaluating.

Your debate was helpful to me. I was able to understand you perspective of cost and it reminded me to take into consideration the profit of each step of production. But I think you never really understood my perspective which is why you continually called it a mistake. If you take a little time to think outside the box, maybe you will see that my approach is not wrong, but just different. The fact that I have not yet disagreed with you on what a wise action would be should be proof of that. Net profit over a series of steps does not mean that making a loss in your final production step is wise.

[Guest]

Hmm, you're right Halee. I must be a very greedy capitalist

Products that DO make a profit over component profits (lil list here for whoevers benefit )

Tables: Sell Price: 180~ : Cost = 7 wood (wood sells @ 16)
Gas: Sell Price: 12~ : cost: 0.2 oil (oils sells @ 20~)
Steel: Sell Price: 130~ : cost: various (sells at about 85 in individuals)

I'll update this when I find more

LOL, yes we all have a little greedy capitalist lurking inside! I know there are things that you can make, which you can buy materials from market to produce, and make profit. You've given good examples, but consider how much more money you could have made if you produced your own materials? Now, also consider the time you took to make the profit.

There are 50 million ways to examine this, and I think some people examine it to death. High end products take time and materials to produce, and if you aren't making your own materials, you aren't making the most profit for the time you are spending. Stop worrying about what others are selling the raw materials for, and focus on producing your end product as efficiently as possible, you'll do fine.

[Guest]

also remember tho, that u can sell a car in a car dealership for pretty much any price u like ... (there is a max that npcs will no longer buy it tho) ... so u could maybe sell it for around 125k ... besides, producing the items rather than buying them from the market DRAMATICALLY will reduce the cost.

[Guest]

i think that almost all of you don't get the point of this topic

Getus: if you can sell materials for 120k, why would you build car shop for some 375k and car factory for 237k just to make additional 5k for one car? you would have to make 120 cars to get the investment back and that's not worth it, considering the other possibilities of spending the money

[Guest]

i think that almost all of you don't get the point of this topic

Getus: if you can sell materials for 120k, why would you build car shop for some 375k and car factory for 237k just to make additional 5k for one car? you would have to make 120 cars to get the investment back and that's not worth it, considering the other possibilities of spending the money

Drvic, I fully understand the point. Take wardrobes for example; If I buy the materials from the market, it costs me around 1100.00 to make a wardrobe... I can sell in my store for 1300.00, and make 200 profit, but it took me several hours to collect all the resources, and to produce the wardrobe. I could have produced the materials myself, and the wardrobe would have cost around 300.00, netting me about 1000 profit. Of course, I still have the time it takes to produce the materials and the the wardrobes, but once you have balanced production schedules, this is not really a factor, you are producing materials at the same time you are selling wardrobes.

Now, if we look at "value" it would seem to be about even, I could have probably made about as much money selling my materials at market, when compared to buying my materials from market to make a wardrobe. But if I am focused on profit, and produce my own material, I make a lot more profit than simply selling the raw materials. I can make profit both ways, and an argument can be made both ways, which is best? As I have shown, I can make 200 more profit selling wardrobes, than I could have made selling the materials at market.

Here's a little secret too... the first million caps I made, were made by playing the market. I produced a few raws and stockpiled them, watched the market and bought up any raws that were well below average price, and when the demand became more than supply, the price went up, I sold my raws and made money. This is how I started the game, so I know it will work. Also, I recently started playing in the German version (yeah, I'm addicted), my company is much smaller, but so far, I am only producing raw materials for market, and I'm doing pretty well. It's amazing how much stones and wood sell for there! Here's something interesting, I produce about 10000 stones in my mine each day, and I sell them for about the same price as the English version gets for 1000 steel. If I had a factory to make steel, I couldn't produce much more than this per day, plus, I would have to have 2-3 mines devoted to producing all the materials to make steel. So, I am better off mining stone at this point.

This is why I say, there are 50 million ways to look at it, and I think it comes down to what works best for you, and what you are comfortable with. We can debate which is the best and fastest way to reach level manager, but to make a profit and enjoy the game, that is up to the individual. Value is important, but cost is more important, in my opinion.

[Guest]

H-B, you are very warm hearted, so I am glad to share with you my way to do the comparison, I hope it can give you some hints and help you to make desicions.

In the example above, the comparison is between buying the row materials from the market or producting them by yourself. Then the main difference here is what will your factory do. Generally speaking, it depends on whether the wardrobe is the most profitable product under the market prices. in order to let more players undertand, I am to do more in detail.

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Let us assume the revenue for selling all the raws of one wardrobe is "C", the price of wardrobe is "P", the time to product one wardrobe is "T", we have:

the profit/time of your last production (to product unit wardrobe) is
(P-C)/T ( ==a)

Then we assume, except the wardrobe, your most profitable production in the Joinery is X, its raws cost "c", its price you wanna sell is "p" and it takes "t" to product one unit. Similarly we have:

Your altinative profit/time (generally it's called opportunity cost) is
(p-c)/t ( ==b)

For more preciseness, let us assume you indeed need wardrobe and there is always enough supply of all kinds things I mentioned above on the market, we can get:

If a>=b,
product yourself,

otherwise,
sell the raws and buy wardrobe from the market
+ buy the raws of X and sell the X on the market.

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The case can be extended when we release the assumption of "indeed need wardrobe" (or maybe also in other ways), but the basic logic is the same.

I hope, from the process above, the reader(s) could understand why in economics we generally use the cost extracted from the market prices (including the ones in contracts) rather than the "showed cost" when we calculate and make desicions. It is far more than the terminology.

Finally, I wanna say, just like H-B said many times before, you don't have to be the No.1, don't have to think the profit too much, since it always sucks to chase after the profit or various kinds of maximization, we have done it enough in the real world, right?

Then let us enjoy the game by your own way.

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(If anyone find any mistakes in my process, please tell me, I will correct them as soon as possible if you are right, thank you.)

[Guest]

so is playing games, but we all do that anyways. . besides, where would you waste time? the CAR factory? if you didnt plan on building cars (or car components) you shouldnt have boughten a factory anyways,

[Guest]

well just to build a car without buying off market you need the following i may have missed some stuff tho

power, steel, oil, E-Components, Silicon, Quartz, Rubber, Seeds, Water, Chemicals, Minerals, Textiles, Cotton

i think you would need 2 power plants, 2 Factorys, 1 Well, 2 Plantations, 2 Mines, 1 Textile factory, 2 Car factorys, 1 Electronic factory, 1 Car dealer

and if ya want to make Q cars ya need to add about 5 more buildings

this is just to make car parts and and the final car did nto put that parts you ned to make the car just everything else you need to make the parts and car