RM companies and economic math

Day 1,418, 19:47 Published in USA USA by The Libertine
As always, please shout the article link if you find this helpful/interesting/arousing

I have concluded that from a purely economic standpoint (ie not caring about fighting) Q2 and Q1 RM companies are the most profitable RM companies to own. The only difference between the two is that with Q2s you need less buildings, but both cost exactly the same for the same output.

As some people may have seen, I recently shouted about my plan to build Q1 Iron Mines until I can build no more. I may be switching to Q2 WRM, but the thrust of the plan still holds. What follows is the math backing that theory up.

And yes, this means I (or anyone copying this method) would be doing less damage. Part of the reason I'm doing this is sheer boredom, but the main reason is that I'm beginning to get to the point where my military rank (ie Field Marshall, Supreme Marshall, God o' War, etc) will not advance to the next level until months into the future. Rather than click 200 times a day to rank up months down the line, I plan to build an economic conglomerate nearly unrivaled around the world. 200 buildings (not including storage) is essentially the goal.

All calculation are based on self-production and no workers. It is currently not profitable to employ workers at any Q of RM companies at job market wages (wages would have to drop below about $110 to hit the break even point for Q5 RM companies).

First: Basic Numbers (based on current 1G = 880 USD peg)

Q1 cost: 500 USD
Q1 cost (w/land): 1,500 USD
Q1 base output: 35 RM

Q2 cost: 2,000 USD
Q2 cost (w/land): 3,000 USD
Q2 base output: 70 RM

Q3 cost: 10G = 8,800 USD
Q3 cost (w/land): 9,800 USD
Q3 base output: 125 RM

Q4 cost: 7,500 USD
Q4 cost (w/land): 8,500 USD
Q4 base output: 175 RM

Q5 cost: 35G = 30,800 USD
Q5 cost (w/land): 31,800 USD
Q5 base output: 250 RM

Second: Cost (w/land) to output ratio

Q1: 42.85 USD per 1 RM
Q2: 42.85 USD per 1 RM
Q3: 78.40 USD per 1 RM
Q4: 48.57 USD per 1 RM
Q5: 127.2 USD per 1 RM

So the rank of best profit to least, using only self-production is:

Q1/Q2
Q4
Q3
Q5

Another way to conceptualize this is that if you purchase one Q5 RM company you are going to end up with only 1/3 as much RM as if you has used that money on Q1 or Q2 (or a mix) RM companies. One Q5 RM company will cost about 31,800 USD. It will get you 250 RM (base) per day. 31,800 USD will also buy 10 Q2 RM companies and 1 Q1 RM company. This will give you 735 RM (base) per day.

Why does it matter?

Well, if you own Q5 companies, it matters a lot.

For every Q5 tank or food worker/self-work you need 2 Q5 RM workers/self-works. So if you have one Q5 tank company with 5 workers plus your own self-work, you would need need two fully employed Q5 WRM companies to supply enough RM for the tank workers (ignoring the fact that it is cheaper to purchase RM instead of hire). For the same cost as two Q5 WRM companies you could have 21 Q2 RM companies. Working these companies each day would (roughly) provide enough RM for yourself plus 2 workers. No (well, negligible) RM purchasing would be required.

What if you have no Q5 tank/food company and are selling for profit?

Here are the (rough) ROI timelines of each Q RM company (amount of days it will take for you to recoup your investment in the company in full).

Each measurement is based on holding three resource bonus regions related to the RM, and @ a 0.30 USD selling price.

Q1: 1,500 USD / (56 RM * 0.30) = 90 days
Q2: 3,000 USD / (112 RM * 0.30) = 90 days
Q3: 9,800 USD / (200 RM * 0.30) = 164 days
Q4: 8,500 USD / (280 RM * 0.30) = 102 days
Q5: 31,800 USD / (400 RM * 0.30) = 265 days

So, no matter what, it will take a minimum of three months of working every day to pay back an investment made in the best RM companies: Q1 and Q2. Past that point you are making pure profit.

Also, you'll get a ton of experience points if you have more companies, if you care about that kind of thing. For each fight (10 wellness lost) you get 1 exp, but for every company self-work (10 wellness lost) you get 2 exp. So there's that.

The Ultimate Test

For the most part, I have been ignoring the relative cost of RMs off the market compared to opening RM companies. Time to stop ignoring that and conduct THE ULTIMATE TEST. Now, on an infinite timeline it is obvious that purchasing RM companies will be cheaper than purchasing RMs off the market. However, there are several ways for us to find the break even point or figure out whether it makes more sense to purchase companies now or later. Let's get to the numbers:

Everything that follows is based on WRM and tanks and based on current market prices of 0.30 per WRM and $32 per Q5 tank (a take home of 29.91 USD per tank based on current taxes) and on a wage of $155 per day.

It assumes:
- "You" own one fully employed Q5 tank company.
- The Q5 tank company is fully paid for (aka not treated as an investment).
- And it assumes that you will be fighting 80 fights a day with a Q5 tank (your self-work worth of tanks; 16 tanks)
- It is based on 3 resource bonuses.

Base
5 workers plus self for Q5 tank company, WRM purchased from market , no investments made along the way.
Tanks produced per day: 6 * 16 = 96 tanks
RM neede😛 4,800 WRM
RM cost per day: 1,440 USD
Tanks left after battle: 80 tanks
Tank sell value: 80 * 29.91 = 2,392.8 USD
Wage cost: 5 * 155 USD = 775 USD
Personal wage (from working at another job market company): 155 USD
Profit on day 1: 2,392.8 - 1,440 - 775 + 155 = 332 USD
Profit in 30 days: 9,960 USD
Profit in 60 days: 19,920 USD
Profit in 90 days: 29,880 USD
Profit in 120 days: 39,840 USD
Profit in 150 days: 49,800 USD
Profit in 180 days: 59,760 USD

Minimal Initial Investment
Enough initial Q2 WRM companies to cover yourself but not the workers.
Tanks produced per day: 6 * 16 = 96 tanks
Initial RM company investment: 22,500 USD (7 Q2 WRM + 1 Q1 WRM factories)
Extra WRM per day (self-produced RM minus self-work RM needed): 840 = 800 = 40 WRM
Market RM neede😛 4,800 WRM - 800 - 40 = 3,960 WRM
RM cost per day: 1,188 USD
Tanks left after battle: 80 tanks
Tank sell value: 80 * 29.91 = 2,392.8 USD
Wage cost: 5 * 155 USD = 775 USD
Personal wage (from working at another job market company): 155 USD
Revenue on day 1: 2,392.8 - 1,188 - 775 + 155 = 584.8 USD
Profit on day 1 (revenue minus investment): 584.8 USD - 22,500 USD = -21,915.2
Profit in 30 days: -4,956 USD
Profit in 60 days: 12,588 USD
Profit in 90 days: 30,132 USD
Profit in 120 days: 47,676 USD
Profit in 150 days: 65,220 USD
Profit in 180 days: 82,764 USD

**Right around 90 days, the model above becomes more profitable than the "all RM purchase" model**

Maximum Initial Investment
Enough initial Q2 WRM companies to cover everyone.
Tanks produced per day: 6 * 16 = 96 tanks
RM neede😛 4,800 WRM
Initial RM company investment: 129,000 USD (43 Q2 WRM companies)
RM cost per day: 0 USD
RM left over: 16 WRM
RM left over value: 4.8 USD
Tanks left after battle: 80 tanks
Tank sell value: 80 * 29.91 = 2,392.8 USD
Wage cost: 5 * 155 USD = 775 USD
Personal wage (from working at another job market company): 155 USD
Revenue on day 1: 2,392.8 + 4.8 - 775 + 155 = 1,777.6 USD
Profit on day 1 (revenue minus investment): 1,777.6 USD - 129,000 USD = -127222.4
Profit in 30 days: -75,672 USD
Profit in 60 days: -22,344 USD
Profit in 90 days: 30,984 USD
Profit in 120 days: 84,312 USD
Profit in 150 days: 137,640 USD
Profit in 180 days: 190,968 USD

**The break even is sometime between day 60 and day 90. By day 120 (4 months) you will make more profit than in 180 days of the second model and 250 days of the first model**

Conclusions

1) Well, first off, I didn't really run any ultimate test. Ultimate tests would have included some mid-test investments. But, to be honest, that sort of modelling isn't really needed. The simple fact of the matter is that if you plan to play eRep for a long time and don't care much about fighting less and want to build an empire then you should reinvest every chunk of 1,500 USD or 3,000 USD you take in to immediately (well, keep maybe a 5k or 10k USD buffer in you bank account at all times) make Q1 or Q2 RM companies.

2) I was going to conclude more, but the above point basically summed everything up.

3) The difference between Q2 and Q1 companies is different short term and long term. In the short term, Q1s are better for experience point gains, although you'll lose more fights at first. In the long term, Q2s are better if you plan to expand to full daily working capacity (ie 200+ buildings). Down the line you can dissolve Q1s for $250 and replace them with Q2s if you ever get close to full capacity.

4) if ur havin' money problems i feel bad for you son. i got 99 buildings but a Q3 ain't one. hit me

5) It is worth noting that in smaller countries it is more likely to be possible to turn a profit employing workers at Q5 RM companies. I believe it was profitable during my stay in eIsrael. In the bigger countries this is not the case, mostly because of RM market saturation that drives down prices.

6) Lastly, it is important to always keep a buffer of both RMs and cash (and even gold). Different "limited time" bonuses can and will change the economic landscape every few weeks or months. It is important to be prepared to capitalize on these changes and not be living day-to-day by reinvesting all of you capital as it comes in. If you have the storage ability, an RM buffer of anywhere from 10k to 20k is smart (in case you forget to re-purchase RMs for a day or two, for example). $5,000 or $10,000 USD is a good buffer level on the cash side. Some will prefer a much larger buffer. Some can get away with much smaller. Always be prepared!

7) I ♥ jerseygirldani

Race you to 200 factories,
CRoy