Ideal Food prices
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by MohanB
Hi guys
I was trying to calculate the ideal food prices with a set of assumptions and came up with the following results...
Assumptions:
Profit - 20%
Tax - 12%
Food production - 100 per work
Salary 100 for Q5 and on pro-rata basis for the other Q levels.
Self mgr production will even reduce prices, so have tried to keep a equality of mgr production and employee production...
For a RM price of 0.31
RM Salary Profit Tax Ideal Price
Q1 31 20 64 72 0.72
Q2 62 40 128 145 1.45
Q3 93 60 191 217 2.17
Q4 124 80 255 290 2.90
Q5 155 100 319 362 3.62
For a RM price of 0.35
RM Salary Profit Tax Ideal Price
Q1 35 20 69 78 0.78
Q2 70 40 138 156 1.56
Q3 105 60 206 234 2.34
Q4 140 80 275 313 3.13
Q5 175 100 344 391 3.91
Anything over and above is actually overpriced and I strongly advice noobs to not buy at a higher price and reduce your potential to make money...
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ps. The calculations are subject to discussion, but guess I can defend 'em 😉
MOHAN
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Well thought out Mohan!! Great stuff : )
What are those assumptions based on?
Hi Becko.. This actually corresponds to Indian market conditions where the assumptions hold good..
yes, it's obvious that data is valid for your country. But can you tell what data have you calculated to come to these results?
Becko, let me give an example of Q5 food production... @ 0.35 INR rm price
with no regional bonus, you can produce 100 food in a facility/day
The basic cost structure is
RM + Labour + Profit + Tax
RM = 500*0.35 = 175 INR
Labour = salary @ 100 INR/day = 100 INR
Profit = 20% - (175+100)/0.8 = 344 INR final price
Tax = 12% = 344/0.88 = 391 final price
so dividing by 100 = 3.91 unit price
ok, that's easy. I thought it covered sum of market production and demand somehow 🙂
the dynamics of market production and demand will impact only the profit % and RM price which I have taken it to be a fixed number...
the prodn and demand numbers are so small for india to make a valid estimates of profit%...
will try to take Bulgaria or serbia as an example and will come up with ideal % soon
\o/
Nice but isn't this kind of Price fixing in a Free market oO!
It is not price fixing..
Free market is to encourage better efficiency and bringing the best prices to the market..
What is happening now is bordering insanity with profit margins touching 50-60%... which can be addressed by controlled buying... or let more imports in....
if everything is left to free market, what would be the job of economy minister 😉
Govt needs to intervene when economy starts to favor one set of players, in this case food producers...
Great calculation..and really good stuff buddy..i hope peoples will lower their food prices...
Tho a imp and one of most effective force.. in determining prices is supply-demand balance.. with 100 recoverable health every hour...lots of wars around, demand is high and peoples are buying at higher price too...
Also You cant blame peoples who build Q5 companies with 390 gold to have less margin..why? look at this -
In india - you ideally wil have 2-3 workers , as per your calculation , with 3 employes one will earn daily 50-60 INR per employee..So -
Total profit per day - 55*3 = 155 INR ~ 150 INR
Monthly Profit - 150*30 = 4500 INR
With gold rate of 650-750 INR per gold that will be around - 7-8 Gold approx..
Now take this into consideration and your return on investment will be about 2% monthly...Which for erep is quite low for 390 Gold amount...SO that explains lil bit of it i guess 🙂
Voted!