Rolling Production v. Flat Out Production MATH
Gnilraps
Come On Up To The House (Mandatory listening)
Day 3153 of the New World
July 8, 2016
Yesterday I published this article about Housing and Pollution.
In it, I proposed a rolling schedule of production which effectively reduces overall production in favor of increasing overall profit margin.
I also proposed an inverse system over two states, Florida and Washington. That part of my system is admittedly weak. It is not possible to increase profits by moving companies back and forth between holding companies as many commentators pointed out. The sole advantage of splitting your companies between two states/holding companies would be the ability to produce a given product daily. This is only an advantage if you are supplying for a Military Unit or some other program where generating daily production is still important.
(I also proposed a method for figuring pollution in that article that is very unlikely to be accurate. I should have left that out as it has caused a few people to become derailed from my main point. What I have learned about pollution, however, needs no formula to understand. It is that pollution statistics are almost certainly based on production levels one day prior. As a major Q5 House producer, I have tested this theory by holding off production over days. When I produce, Pollution is 25% the next day. When I do not produce, Pollution is around 8% the following day and remains at that figure again the next day so long as I do not produce.)
So in this article I will not focus on the two-state dynamics of the system, nor on the merits of my dopey pollution formula.
Instead I will focus simply on defending the premise of rolling production v. flat out production.
It all boils down to a single controversy between two competing systems.
On one hand is to run your companies flat out daily.
In the state of Washington, this will result in 25% pollution across the board for HRM and all Q levels of finished goods. I know this because if I run my entire set of companies, that is what happens on the following day. 25% across the board.
So the flat-out method of production limits production bonuses to 193%.
Looking strictly at HRM, 193% production means 2410 units from 5 work tickets.
Using a rough estimate of what you might be paying for those 5 work tickets, let’s assume your cost is $105 per WT. (Current market wage in eUSA is $117, but let’s work with 105).
105*5=525
You paid $525 for 2410 units.
After two days you’ve paid $1050 for 4820 units.
Your cost of goods is .218 per unit.
Hang on to that figure.
Now lets look at rolling production with the assumption that we can totally eliminate pollution (we can argue the potential for this later, let’s just assume for now that we’ve eliminated pollution).
A HRM company at zero pollution (218
😵pumps out 2725 units per 5 WT.
After 1 (and 2) days, you’ve paid out $525 for 2725 units.
Your cost of goods is .193 per unit.
In a market where HRM sells for .25 you’ve increased your profit margin by 2.5 cents per unit, a 10% increase!
To put it another way, each (Q5) HRM company generates $156.25 profit per day using the rolling formula and $77.5 profit per day using the flat out formula. After two days, the rolling HRM company has 156.25 profit and $525 cost. After two days the flat out HRM company has $155 profit and $1050 cost.
Already you can see how rolling production can benefit us all.
In the finished goods markets, the math is only slightly more complex because of 1% VAT. However the results are the same: rolling production yields far greater profit margins due to reduced pollution.
One of the arguments against rolling production is the difficult proposition of totally eliminating pollution. I agree that this is going to be a problem. So let’s look at the math with polution figures closer to 5% and see how that looks.
At 213% bonus, the HRM company produces 2660 units per 5 WT.
That yields a cost of .198 per unit.
(Here we begin to see that in HRM, every 5% of polution increases cost per unit by a half-cent).
The same $525 cost of goods yields a profit of $140.1
So even if pollution cannot be completely eliminated, the reduction of pollution yields such significant increases in profit margin that it is definitely worth the effort. And this is just 1 HRM company in my examples. If you own 10 HRM companies, you stand to increase your daily profits significantly by running your companies at half speed... ie. every other day in coordination with everyone else in Washington.
Here’s a graphical representation of how profits fall dramatically when pollution rises:
This graph is pretty pathetically useless, but it makes my article look better.
There’s one more point I’d like for you to consider. Rolling Production yields a double bonus on manufactured goods. How? Good question.
First of all, a decreased pollution yields an increased production level per work ticket spent. So your $105 is already producing more house with the rolling method than flat out.
However keep in mind that if you are producing your own HRM for production in your factories, you are procuring HRM as much as .025 less using the rolling method. For a Q5 house, under optimal conditions, that is a savings of as much as $112.5 per 10 WT’s, or over $300 PER Q5 HOUSE!
So I don’t want to hear that you are not willing to click your factories every day because it’s not worth it. We are not talking about a small bump in profits, we are talking about very significant gains in profit margin.
And so I will reiterate what I asserted in my previous article.
In Washington State, ONLY spend work tickets on HRM on even numbered days (using eRep’s numbering system). And ONLY spend work tickets on finished Houses during odd numbered days.
HRM - Even
Manufacturing - Odd
You may now return to your regularly scheduled clicking
Comments
o7
wut
This graph is pretty pathetically useless, but it makes my article look better.
Lol thats true.
I am going to do my part in florida, but with this plan its going to be alot easier to coordinate with the MU communes to drop it a bit, once you have that metric just using the bulk peeps, that good news will trickle down to anyone else that wants even more money for stuff. I love this plan. I always said we are gonna need nation wide coordination when it comes to placement of companies, as well as working them to get the most out of them. Here is too hoping this news gets to everyone. Also love the idea of an epa thing in the government, that might not be a bad idea either
Gnilraps. usa market wage is not 117 🙂 it is 127!
would you mind adding a graph. that varies wage vs benefit of rolling production?
I am almost certian if you used the correct market wage your numbers would favor you almost 100 times more!
market wage has increased since I began writing the article.
And yes, you can easily do the math using higher wages.
I'm pretty sure you can get 117 workers from eSerbia or other country that you have holding. If you post the offer for 120 at the moment than you will be on top for Serbia.
If you have holding in Mexico than you can get workers for 100. For some other countries it is even less.
If you hire employees from another country than they pay 80% of the 2%tax to USA and 0.2*2% to their own countries.
If the admins didn't fix the bug (only one page with top job offers) it would have been more interesting.
Top salary is irrelevant. You can always hire twice or three times as many employees than you need, and 3 days later reduce their salaries to something like $ 90 - 95. From my experience, about a third of those employees remain, so you can have workers at lower salaries with very little trouble. Ofc, those that work 5-6 times a day will surely quit, but 2-clickers won't even notice the change.
I'll ust leave this here
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
Agreed Gnilraps appearently wrote this article in response to mine, which makes a similar argument, but he fails to refute it.
do you even read?
Read this article and tell me with a straight face that you will be making more profits flat out than rolling.
And if you do that I can then permanently ignore you.
I give you more credit than that, though. READ and you will see.
ah but cornell if gniraps gets his idea working his profit margin will be lower than you could ever achieve! thus pricing you out of the houseing market by making you slowly produce for a loss until you stop production or go bankrupt.
I do agree gnilraps idea is a bit early. as i am very profitable being inefficient with my production, once i no longer am profitable i will try his idea. to improve my profit margins!
gnilraps is thinking long term. i am not ready to think long term.
what gnilarps states (correctly) is that if everybody agrees on the odd/even scheme, then everybody will maximize the profit margin per work ticket. but the commons thingy does apply as if i dont follow the scheme ill be able to benefit from the low pollution for houses and hrm on both days, hence doubling my profit. until everybody jumps on the cheat wagon and pollution rises again... tragic, huh ? 🙂
ghishae you miss something. if gnilraps only produces on the low production day his average profit margin will be higher than you. so he can sell his houses on average lower than you can. if his average margin falls to say one percent. your profit will be negative 14%. would you continue to build houses if ever hosue you produce will lose you 14%. i think after a while you would stop producing hosues! once you ran out of cash to pay workers!
then gnilraps would have 100% market share. sure it will take him a long time to get 100% market share. but once he does no one will be able to get into the housing market!
@jkeller4000 - I am impressed at your grasp of things here. Kudos.
But I want to state outright that my goal is NOT to chase anyone out of the market. My goal is truly just to begin working together for higher profits.
If we do this right, we will all be rolling in the cash.
Also, with fewer product on the market, we will probably see a rise in prices too.
gnilraps capitalism is not about helping people 🙂
anyways you gained a few points in my karma book for your comment 🙂
Gueneo wrote a similar article a week ago:
http://www.erepublik.com/en/article/2604278/1/20
This might be the future for every country. People make more profit with the same production, but produce less overall, so it also reduces overproduction.
I reread your article for good measure. I may write an article title why Gnilraps is still wrong. But is that really necessary.
If you read my article I agree that producing on a rolling schedule is more profitable if we reach enough participation than everyone producing at current. My criticism is that it is unstable, because it creates a dominant strategy for cheating. Cheates will always make more money, unless you come up with a plan to disentivise cheating.
I saw JKeller make a point on pricing people out of the market. So basically pretty much government intervention or private whale would be needed to artificial fix the insentive structure. I have seen no rebutal that actually adresses the point that you would be stupid not to cheat when you know others will cheat, because if you don't you will probably be the biggest loser at the current level.
You keep defaulting the premise that the incentive is created for cheating.
but you are wrong.
I do not dispute the idea that control and participation are difficult, and I do not expect 100% participation. I expect some small amount of pollution.
The cheater, by "cheating" the system, will simply waste whatever clicks he makes on "wrong" days. He's not actually getting away with anything, he's actually screwing himself out of profits.
So it isn't cheaters I worry about, it's people who are too lazy to care or too out of touch with the community to learn about the system.
And EVEN WITH some pollution, the rolling system will benefit as many as use it.
So opt out if you want, you'll screw yourself a wee bit more than you are screwing everyone.
(I am not directly addressing you, DT, with that last sentence... I'm addressing anyone who reads and chooses to opt out).
Nope..... I am better off if I opt out. Hard economic data that resulted from years of research would agree. It may seem like a paradox, but if you look at my article the math works out as well. It is just counter intuitive.
I don't see you accounting for the price of moving the House Factories, and you've seemed to skip over the question of what factories you would be moving multiple times.
There will be no moving of companies.
Forget the Wash/Fla thing, that is not the point.
Focus ONLY on Wash (or Fla) and rolling production.
In other words, stick all your companies in one holding in, say, Wash.
Then alternate your production daily between HRM and Finished good.
If pollution can be reduced by even 15%, profits soar.
So again, ignore the part about Fla/Wash... that was stupid of me.
good idea
Gnil, you & jkeller are just gonna have to price everyone out for them to understand
Together we succeed. 🙂
Can I have a question please?
What happened in Kentucky??
http://www.bbc.com/news/world-us-canada-36737185
The Ark is Plato's Ark? This is a reason of mass pollution? Can you raze for us please? Imo the 25% pollutoin is too much...I wanna build more tanks.
Thx!
Where did Josh Frost setup? :3
You guys evidently have way more time for this game than I do. I still have a RL to run!