Power plant question

Guest · Post by **Guest** » 27.02.2008, 14:10

Hi,
My doubt is:

I would like to build a power plant, and my simple question is in which color will be the best.

Explaining better:

Red area ---> Power is considered an industrial production? Will I get a 25% more?

Yellow area ---> Power is considered insteand raw material, so it's better in the yellow? Will I get 66% more???

Green area ---> None of them two is really important, better get low costs in the green.

Which is the right supposition? How power is considered?

Guest · Post by **Guest** » 27.02.2008, 14:41

This question has been asked many times so let me list some things to consider from my personal experience with graphs.

1. The yellow production increase does not apply to power so the extra cost would be for nothing.

2. Which (Green and Red) is better depends on the price you will sell it at.

I plugged in the following equations into my graphing calculator:

Red: (X-.03)*1.25
Green: X-.01

X=Sell Price

With this the lines won't be parallel so they will meet and which gains more profit will change. The green generates more profit at first but as the price slowly increases, the closer the lines meet until they do and switch sides. The price they switch and red begins to become more profitable is at the price of .1 per power. So if you sell for less than .1, then go with green; if you sell for more than .1, go with red.

When we sell on the market, the price changes so the equations will too.

Red: ((X*.9)-.03)*1.25
Green: (X*.9)-.01

With these equations for selling at the market, the intersection where they switch sides is .12222... This means that green is profitable if you sell at the market for .12 or less and red is more profitable if you sell at the market for .13 or more.

At the current prices, Green would be the best choice. When the market changes, change with the market.

Guest · Post by **Guest** » 27.02.2008, 15:10

Thanks for clear the explaination.

Guest · Post by **Guest** » 27.02.2008, 20:41

I have tried to explain this sometimes before, but I have to admit that I never could explain it as good as you did here Business, Very good explanation and what a simple calculation that is...

Regards.

Elwood

Guest · Post by **Guest** » 28.02.2008, 05:19

I wish all the games have such simple formulas

Guest · Post by **Guest** » 21.03.2008, 11:16

Younger Business wrote:I plugged in the following equations into my graphing calculator:

Red: (X-.03)*1.25
Green: X-.01

X=Sell Price

I doubt this is the right way to compare them. This does not take into account the capital cost of the plant, i.e. the cost of money. There are many ways to compare investments, but this doesn't seem to make any sense. Personally, in this case, I would just go with marginal cost, for which the production multiplier is irrelevant and should rather be left out.

I'm just a noob, so flame with grace.

-m-

Guest · Post by **Guest** » 21.03.2008, 14:34

mirni, that is the right formula. Building costs are only passed on when you sell the building itself.

The formula takes in the production costs and production speeds of both areas. That is all you need.

Guest · Post by **Guest** » 21.03.2008, 16:27

I use green plants, less cost to produce them. I use them in my production chain, so saves me quite a bit of money.

Guest · Post by **Guest** » 21.03.2008, 17:22

Azer Productions wrote:That is all you need.

Actually, I need more. Because the above formula doesn't answer the question "How should I invest my [enter amount here] capital?" And it doesn't properly answer the question how much money I make per unit sold, another useful number in order to price production.

Actually, the formulas above answer how much money I can make per hour from a single factory, depending on the region they have been founded in. In order for the two factories to be comparable, though, they should have cost the same to build, shouldn't they? What is the payback period for each factory? This is something not answered by the above formulae -in fact, a wrong impression is generated by the above formulae.

Just my 0.02

Guest · Post by **Guest** » 21.03.2008, 17:37

Power plants in green cost less to build as well as having a greater profit margin at today's market prices for power (.06-.08 ). Therefore, they will pay for their fixed construction cost more quickly.

Guest · Post by **Guest** » 22.03.2008, 03:18

mirni wrote:
Younger Business wrote:I plugged in the following equations into my graphing calculator:

Red: (X-.03)*1.25
Green: X-.01

X=Sell Price
I doubt this is the right way to compare them. This does not take into account the capital cost of the plant, i.e. the cost of money. There are many ways to compare investments, but this doesn't seem to make any sense. Personally, in this case, I would just go with marginal cost, for which the production multiplier is irrelevant and should rather be left out.

-m-

You're somewhat right actually.

If we were to consider purely cash build costs, red costs 66% more than green. That means for the same cash you spend on 1 red Power Plant, you could have 1.66 green Power Plants. And the speed bonus from red wouldn't hold up to that 66% of another plant.

However, that's not accurate either - building needs materials. Forget the price of materials for a second, lets assume that it's trivial. Simply consider the amount of materials in the cost. There's no one answer. Do you use the Merchant levels of 100 / 50 / 10? Or the manufacturer levels of 180 / 90 / 18? What about expansions, where you're using all those materials per foot.

You can probably visualize this yourself (I have a graph somewhere but don't know where I put it) but as time goes on - the building gets bigger and you go up in rank - the build cost for green and red get closer and closer. Simply because they both spend the same amount on materials, and the cash discount starts looking small by comparison.

And then there's the issue of land slots. Even if you did buy 3 greens instead of 2 reds, you'd just run out of slots sooner. Which accelerates your move from cheap building ot expensive expanding.

All of this means that for simplicity's sake, the production cost & rate approach is simpler, static, and accurate enough.

Guest · Post by **Guest** » 22.03.2008, 10:06

Thank you, Knolls (& all). The important part -and the one I never thought of- is slots. Building in expensive regions saves you slots. Which will become important later in the game. So, for now, I'll go cheap and gradually move to more expensive territory.

Makes sense, really.

-m-

Guest · Post by **Guest** » 22.03.2008, 16:34

Capitalis is off dodging IEDs in Iraq right now (man the things that guy does for fun...) but I had mentioned to him once that I felt remiss in never having calculated the value of a slot. And he did some good work on it himself. So if you'd like to ponder more on what a slot is worth, I'd advise checking out his guide on the subject.