Optimal Selling price for stores

[Guest]

I'm late for work, but I can't resist a few quick points (sorry for being short).

For kiddbecks profit calculations, I would add one minor detail, which is the 10% market commission. So I think all market prices in formulas would need to be multiplied by 0.9. Other than that, I like the way the formula is developing. I hope I have time later to really think it through.

H-B, I think maybe you are overcomplicating the issue of the formula. If you look at the post where you cite so many different factors, you will see, as others have pointed out, that several of them are the same. As for intangibles, it is possible that they are part of the real formula, and that would make creating our own formula very difficult, But I hypothesize that all the input parameters are tangible (that is accesbile to the average player and I don't believe you would even need to stop selling in your stores because all the needed info would be outside of your store). I agree that you would have to punch in these few numbers each time you restocked your store, but the whole point of a formula with variables is that variables change. That's why they call them variables. If the formula is constructed properly, then the formula will not change with the variables, only the values of the variables themselves and the result will change. No extra work is needed each time you restock your store other than to punch in the new variables.

Some models are unreasonably difficult because we do not understand all the variables. Your example of the number of cells in the human body is one. While there is a possible model, it is not feasible for us to figure it out. However the formula in this game is not nearly so complicated and if the necessary information is available, then it is quite feasible to develop an accurate model that will not change with the variables. I have already seen this done (and done a few myself) in several other online games with great success.

I also think as someone else mentioned, that the happiness with your price factor may not take all factors affecting sale time into account. I'm still working on that one myself, but I think that your optimum satisfaction for a particular product may not be the same from one day to the next. But I'm still trying to figure that one out too.

-Tim

[Guest]

For kiddbecks profit calculations, I would add one minor detail, which is the 10% market commission. So I think all market prices in formulas would need to be multiplied by 0.9. Other than that, I like the way the formula is developing. I hope I have time later to really think it through.

-Tim

Yes, you are right.

I ignored the 10% charge because in a model interpreting , we generally try to focus on the thought.

In addition, in theoretic point of view, because of the existence of contracts, the reasonable "market price" should be:
buy price = sell price = (price on the market)*95%.
Which means share the utility equally.

[Guest]

H-B, I think maybe you are overcomplicating the issue of the formula. If you look at the post where you cite so many different factors, you will see, as others have pointed out, that several of them are the same. As for intangibles, it is possible that they are part of the real formula, and that would make creating our own formula very difficult, But I hypothesize that all the input parameters are tangible (that is accesbile to the average player and I don't believe you would even need to stop selling in your stores because all the needed info would be outside of your store). I agree that you would have to punch in these few numbers each time you restocked your store, but the whole point of a formula with variables is that variables change. That's why they call them variables. If the formula is constructed properly, then the formula will not change with the variables, only the values of the variables themselves and the result will change. No extra work is needed each time you restock your store other than to punch in the new variables.

Some models are unreasonably difficult because we do not understand all the variables. Your example of the number of cells in the human body is one. While there is a possible model, it is not feasible for us to figure it out.

Tim, don't get me wrong, I fully understand you can develop and implement a formula, and it might actually help you sell more efficiently. My only point was, you can't develop an accurate formula which works for every product in every area under every condition. It's the same as developing a formula to determine number of cells in the body... sure, it's possible in theory, but in practicality, it's virtually impossible.

You say first, the intangibles possibly have something to do with the formula, then you hypothesize they don't, then you base your evaluation of the 'formula' on your hypothesis. Certainly you can see the flaw in your logic here?

I don't believe you would even need to stop selling in your stores

Any formula you develop would have to be used at the time you stock, otherwise, the data input is not going to be the same variables. It would also have to be re-calculated if you change anything in the store during your sale, as the game will re-calculate its formula at that time.

the whole point of a formula with variables is that variables change. That's why they call them variables. If the formula is constructed properly, then the formula will not change with the variables

This is the part I can't seem to get you to understand. The formula can never be 'constructed properly' because there are too many unknown factors (intangibles) that we simply don't have access to. Sure, you can input what you know (tangibles) and there is probably something to be gained in doing this, but the problem is what you don't know, and can't punch in. Some of these intangibles you don't know, can dramatically effect any presumptive formula and how it works. There could be as many as 20-30 variables which will effect the 'optimal price' at any given time, I don't know this for a fact, but I highly suspect it. We just don't realize these things because it is an internal function of the game, and we never see them.

I realize what you and others are saying, I just think it's an exercise in futility to attempt developing a 'formula' that is always [censored]. Because there are far too many variables, they change constantly, and some of them are unknown and can't be determined. Now, could you develop a formula that comes close? Sure! Would this formula help you sell at a more optimal rate than guesswork? Of course! Is it worth your time and trouble to do? I doubt it.

Another factor that no one seems to be discussing here, is production rate. It really doesn't matter what your formula says is the best price for maximum profit per hour, if your production can't keep up with that rate. Sure, your store might sell its product at the best possible price for best possible profit using your formula, but what good does this do you if the store has to sit idle waiting for you to produce more product? Wouldn't you be marginally better off to sync your store with production, so that it is selling something all the time? Even if you aren't selling at 'optimal price' you are still selling, and that is important.

Here is an example, during this contest, I have had to change my grape stores over to something else, I chose chickens, they seem to have a fairly high profitability, and I can produce them in my cattle breeding buildings. So, it takes me as long to make a chicken as it takes to make a cow, yet when I place the chickens in my store at average market price, they sell in a matter of a few hours and my store is empty again. I am sure, from a purely mathematical standpoint, I am not selling my chicken at the best 'optimal price' for profit, as I have about 77% of my customers thinking my price is too high. Yet, this is the price I must sell chickens in order to allow my production to keep pace with my store. Now, I could use your 'formula' and determine the 'optimal price' but what good does it do me to sell all my chickens in 3 hours and let my store sit idle until more chickens are produced? So, regardless of what the formula might tell me, it makes more sense to sell my chickens at higher price, even if the profit-to-time ratio is out of whack, because at least I have a store selling product instead of sitting idle. Is it better to make the maximum profit per hour for 3 hours of sales, or to make a continuous profit all 24 hours of the day, even if it's not the most efficient rate?

[Guest]

but the formula would tell you, that you should increase your production to maximize your profit

[Guest]

but the formula would tell you, that you should increase your production to maximize your profit

Here is a little hint, the more you produce, the more profit you will make. ALWAYS!

[Guest]

but the formula would tell you, that you should increase your production to maximize your profit

Here is a little hint, the more you produce, the more profit you will make. ALWAYS!

what I wanted to say is, that to make more money, you have to expand your production and also your shops

if you produce too much, you can sell it all, but for less profit, if you produce too few, you can sell it in desired time, but again for less profit

in other words, the formula would tell you, whether to expand the shop or the production facility

[Guest]

One other thing you might want to consider is market average and how your 'optimal profit formula' might effect it. Say your formula tells you the 'optimal' rate is 25% below what the average market price is... so you sell your product at that rate... tomorrow, you notice the average price has dropped, but you formula is still telling you to sell at 20% below market rate, so you do this... the next day, the market price has dropped again.

Maybe there is a formula to determine how long it will take for you to figure out that you are driving the market average down, and defeating any constructive purpose your formula may have had? Just a thought!

[Guest]

what I wanted to say is, that to make more money, you have to expand your production and also your shops

You don't need a formula to tell you this.

[Guest]

if you produce too much, you can sell it all, but for less profit, if you produce too few, you can sell it in desired time, but again for less profit

You will never make less profit for selling at a higher price, you will always make more profit. The same is true for selling at lower price, you can't make more profit by selling for less. What is being 'formulated' is the perfect profit-to-time ratio. And this is fine, if you don't have to consider production rate, unfortunately, that has to be considered as well, it's part of the game.

[Guest]

it looks, like we're talking about different things

[Guest]

Tim, don't get me wrong, I fully understand you can develop and implement a formula, and it might actually help you sell more efficiently. My only point was, you can't develop an accurate formula which works for every product in every area under every condition. It's the same as developing a formula to determine number of cells in the body... sure, it's possible in theory, but in practicality, it's virtually impossible.

You almost seem to be suggesting that the formula is different for different products. While I fully expect the input numbers (parameters) to be specific to each "product in every area under every condition" surely you're not suggesting that the developers of the game created different equations for each product etc? Either that or you have to assume that the model was only coincidentally correct for a specific set of data, but this would easily be determined during the modelling and prove that model to be incorrect.

You say first, the intangibles possibly have something to do with the formula, then you hypothesize they don't, then you base your evaluation of the 'formula' on your hypothesis. Certainly you can see the flaw in your logic here?

No flaw in that logic, although maybe some misunderstanding. There are two possibilities: either there are intangibles or not. No one but those who have seen the game code or been told by those who have know this answer for sure. The way I propose to determine the answer is to start with a hypothesis (there are no intangibles) and then test the hypothesis by modelling the data. If there are intagibles in the real model, then I would never be able to create a satisfactory model from data available to me. If I do produce an accurate model, then it would be proof that there are no intangibles in the real equation.

However you seem to make the same mistake you accuse me of:

there are too many unknown factors (intangibles) that we simply don't have access to...
I don't know this for a fact, but I highly suspect it...
there are far too many variables, they change constantly, and some of them are unknown and can't be determined.

It seems you are often stating your hypothesis as fact, even though you admit it is not.

Simply put, we each have our suspicions, but whichever hypothesis is right, the method of modelling is the way to determine it. I see no reason to try to convince you my hypothesis is correct without testing it. I have my reasons for my hypothesis as I'm sure you do. Nothing wrong with that, we just don't know which one is right until we test them. If you really wanted to make an argument for intangibles, the least you could do is list a few possibilities. I can think of a few that could possibly be there, but I doubt they would be for various reasons.

I don't believe you would even need to stop selling in your stores

Any formula you develop would have to be used at the time you stock, otherwise, the data input is not going to be the same variables. It would also have to be re-calculated if you change anything in the store during your sale, as the game will re-calculate its formula at that time.

I agree that the result would be time specific and need to be calculated at the time of restocking. But this could be done in the minutes before restocking. I seee no reason to clear your racks before entering in your numbers. Unlike playing with the price to see the effect on sales time, you would not need your store to perform the calculation. As for the time effect, I believe the server would only update its averages periodically. In most games, these kinds of statistics (like avg price/quality) are only updated once per hour since it takes a lot of work by the server to sift through the whole database. If this is true, then your calculation would be good for that whole hour (this could easily be tested by checking to see how often the averages update on the stats page). Then, as soon as you restock, the inputs that you have just entered into your calculation would take effect.

As for the use of the model, I think it would be a useful tool, but I'm not trying to argue it would give you the ultimate selling advice. It would merely be one more tool to help us determine what we should do (we could add it to KapiTools ) Drvic is correct that it could be used to help you balance out your production and sales. You seemed to have missed his point. If there is an optimal selling rate, then there is also an optimal production rate. In the end, it would be best to have the production be similar to your optimal sales rate. Anyone who lets their shops sit empty to sell at the optimal rate is using the tool improperly, but that does not invalidate the tool.

[Guest]

You almost seem to be suggesting that the formula is different for different products. While I fully expect the input numbers (parameters) to be specific to each "product in every area under every condition" surely you're not suggesting that the developers of the game created different equations for each product etc? Either that or you have to assume that the model was only coincidentally correct for a specific set of data, but this would easily be determined during the modelling and prove that model to be incorrect.

Let me ask you Tim... this game has been around for a while in Germany, has anyone come up with this so-called formula? If so, does it work? If not, I rest my case.

We are going in circles here, and I don't know any more than you know, I am just speaking from my own opinion and observations of the game so far. I am still relatively new to this, and I'm no expert by any means. I realize that formulas can usually be created for any sort of game based on formulas, that is not in question here. The accuracy, validity, and subsequent usefulness of the formula, is what we are debating. Here we find pages and pages of people defending their number crunching, and that is all fine and well, but I don't see a formula that has proven to perform as advertised, and I don't believe one can be created. The reason being, this game is far to complicated and has far too many variables, both known and unknown, to reverse-engineer a valid formula that will work in all instances.

It seems you are often stating your hypothesis as fact, even though you admit it is not.

I'm not stating anything as fact, I have said that I could be wrong, but I certainly believe there are intangibles that we can't possibly know, which factor into the equation. If there weren't, a formula could have easily been constructed by now, what with all the number crunchers working on such a project.

If you really wanted to make an argument for intangibles, the least you could do is list a few possibilities.

I presented these earlier, and it was argued that those intangibles had been considered, or that they weren't a factor. To give you a more precise example of what I mean by an unknown intangible, consider this... you don't sell "average quality" products in your store, yet the average quality is a variable you know from the stats in your area, for the product in question. The actual sell rate is going to depend on how many other stores are selling that same quality product, not just the average, but the actual number. In other words, if 90 stores are selling Q4, and 10 stores are selling Q1, the sales rate might be higher for the lesser quality at a lower price, because less of it is being supplied. The average quality is 3.7, but you can't sell that specific quality in a store, and maybe there is no stores selling Q2 product, and thus, a store selling at Q2, might produce more favorable sales than Q1 or Q4. There is no way for us to know how many stores are selling which quality, we only have an average of all stores. This intangible is going to effect the way a static formula performs, and make it impossible for you to obtain uniform results across the board. This is a simplistic example, and there are many other intangibles like this, but they are all going to factor into your formulas.

Again, I am not knocking you or those who want to spend time working out some formula they think will help them sell more efficiently... I just think it's like looking at Apollo 11, and thinking you can accomplish the same thing with a pocket calculator and protractor. In theory, maybe you can imagine this, but when it comes down to it... where is this "formula" and why isn't everyone using it already?

[Guest]

We sometimes tell ourselves nothing is impossible, this is a very postive outlook on life.

Sometime we realise something is not possible or will take too long to acheive. This is a more realistc approach.

People who have the postive outlook sometimes acheive things that the realist's think is impossible, and yes sometimes they waste a lot of time trying and end up failing.

But at the end of the day how each of us, spends their own time is up the indivual. You shouldn't knock people continually for trying to do something that you think is not worth the effort.