Problems managing factories

[bip]

Yesterday I started a new game as Prussia after not playing Victoria for a year. And I seem to have forgotten how the economy in the game works. I just can't figure out, what are the best goods for trade. For example: what is more profitable -- producing an selling simple clothes or producing and selling luxury clothes? Or does it have any use to build artillery instead of just selling steel? I mentioned, that more advanced goods are always more expensive to produce than the "first level goods" so I am not sure I can make more money producing advanced and luxury goods..
How can I decide which factories to build in order to earn money?

 

[The Starfox]

Assuming you are playing ver 1.4, and mostly speaking for Prussia/Germany: early on many factories, espcially in the armaments industires are too inefficient, and demand too low to earn any money.

Early on though steel, and lumber factories are good money makers. Fabric and regular cloths are ok money makers, but not that great at first.

Steamers are the big money makers early on in the game. Beware you will need lots of steel to make those ships.

Railroads are also a high priority early game, when you dotn have much machine parts to build the big factories anyways.

Focus on industry techs early on to boost the efficency of your factories.

Towards the middle game cloths factories are better money makers, and luxory clothes become a big money maker also. Still need to focus on steel and steamers though.

Towards the second half of the game most industires will be efficient enough to make at least some money. The high end luxory goods become very profitable and diversifing into luxory clothes, and luxory funiture, fuel refineries, electirc gears, telephones, and dye factories will bring in the money by the boat load.

Towards the end the top end goods like airplanes, cars and such will be your new cash cows.
All the while be sure to maximize efficiecy with the proper craftsman to clerk ratio, and the optimal numbers of capitalist per state.

 

[bip]

Well, I played until Unification of Germany and got all those factories from the minors. And I get the biggest ammount of cash if I close all factories other than lumber mills, steel industry and cloths facilities. So there is no profit from luxury clothes, furniture + luxury furniture and machine parts in 1871. Is it normal? And how large for example does a cloths factory has to be to supply a first level (5 POPs) luxury cloths factory? I think there is no use from a luxury cloth factory, which generates 30 $ profit, but needs to be supplied by cloths factories which together generate more than 30 $.

 

[The Starfox]

Hehe, that $30 profit from the luxery cloths factors in the cost of using regular cloths in the process. You will still make just as much money from the regular cloths factory with the luxery cloths factory because the luxuery cloths factory is basically buying the regular cloths and converting them to luxery clothes. So a $30 profit fromt eh luxery cloths is deffinatly worth it.

Same goes from the other higher level factories. From a level 3 or 4 steamer shipt yard, Ill be making a $60 profit or more depending if I have adequate supplies of steal, and Iron to make the steel without having to buy them off the world market.

I am usualy able to upgrade the regular cloths factory in westfalen to level 3 or 4 by unification time. Ill often have a level 3 steel facotry in rheinland, a level 2 steel factory in Schlesien, a level 4 or 5 steel factory in Congress Poland, and after unification a high level steel factory in one of the Bavarian states.

The states of Holstein, Hannover, and East Prussia are where I place my level 3 and higher steam ship yards.

 

[bip]

So you mean the ammount of money the luxury cloths factory generates is equal to profit from used ordinary clothes + additional profit from luxury clothes? Is it the same with othe advanced factories like luxury furniture?

 

[bip]

I just don't understand it. I have a lumber mill an a paper factory i prussia. The lumber mill makes 8$ income and the paper factory 4$. So both are profitable, right? If i close the paper factory und jsut sell lumber, my overall income will rise. Why does it happen? Am I not supposed to get more money, when both factories make profit then if only one factory makes profit?

 

[OHgamer]

I just don't understand it. I have a lumber mill an a paper factory i prussia. The lumber mill makes 8$ income and the paper factory 4$. So both are profitable, right? If i close the paper factory und jsut sell lumber, my overall income will rise. Why does it happen? Am I not supposed to get more money, when both factories make profit then if only one factory makes profit?

Both are profitable. but by closing the paper factory, you can sell more of the more profitable lumber to the WM, so your income rises faster.

 

[bip]

Both are profitable. but by closing the paper factory, you can sell more of the more profitable lumber to the WM, so your income rises faster.

So, if I have three cloths factories which together generate an income of 40$ and one luxury cloth factory which generates an income of 30$ and "consumes" all the clothes which are produced on the 3 cloths factories, then it is more profitable to close the luxury clothes factory, right?

 

[unmerged(49082)]

Let's suppose you have two factories: lumber mill and paper mill. Both produce 1 unit every day when 5 pops are working in them. Lumber mill shows £10 profit and paper mill shows £6 profit. It means that the price of 1 unit of lumber - the price of imput timber equals £10. The price of 1 unit of paper - the price of imput lumber, let's suppose it's 1 unit, equals £6. It means that you do earn money by putting pops into paper mill but you would earn more if you put all your pops to lumber mills. In the setup with both factorie operating you earn £10 + £6 = £16 in total. But if you put all pops to work in lumber mill you'd earn 2 * £10 = £20 in total. Alternative cost of employing pops in paper mill is £4. That is why your income increases after you close it.

 

[bip]

Let's suppose you have two factories: lumber mill and paper mill. Both produce 1 unit every day when 5 pops are working in them. Lumber mill shows £10 profit and paper mill shows £6 profit. It means that the price of 1 unit of lumber - the price of imput timber equals £10. The price of 1 unit of paper - the price of imput lumber, let's suppose it's 1 unit, equals £6. It means that you do earn money by putting pops into paper mill but you would earn more if you put all your pops to lumber mills. In the setup with both factorie operating you earn £10 + £6 = £16 in total. But if you put all pops to work in lumber mill you'd earn 2 * £10 = £20 in total. Alternative cost of employing pops in paper mill is £4. That is why your income increases after you close it.

Oh... why should the overall income from both factories (lumber and paper) be 16$, if a can't sell any lumber at all, because it all used to produce paper?
One more question: my lumber mill shows, that it's profit is 10$. But if I close it, my overall income will hardly decrease. I am not selling any timber, so in this case it is impossible I make the same money with timber. But what is the cause then?

 

[unmerged(14102)]

In addition to OHGamer's answer, I will again reiterate that the economic model is now quite 'live'. My testing shows this quite clearly. So you need to abandon any pre-v1.4 notions about "what are the best factories" and start looking at the WM itself to determine in your game which is best. If you fail to learn this, or choose not to, do NOT attempt to play an MP game because you will be getting the pizza and beer bill [at least that is how we play, f low score/1st out gets the bill! }

I have data now showing >50% differences in mid-game prices on various commodites. The reasons are very clear also: historical demand. Meaning, exactly how the WW POP's grow and are promoted in the game has a big influence on the demand on goods. Since there are so many variables involved in this amoung them: events, AI decisions, Player decisions, luck, ... you cannot possibly predict them NOR are they repeatable game to game.

What this means practically is that Steamers being a great build in one game might only be so-so in the next. Paper might be terrific in one game and average next. Further, 'best' will have a very time dependent meaning. You now need to be prepared to replace factories and react to World Demand.

PS: I think I'm going to copy this reply as it is easily the 3rd or 4th time I've had to make it in the last few weeks.

 

[King]

As a personal preference I build factories to supply goods my pops demand. If my pops can't buy it, I supply it. It means that the factories will always make money because my goods will be demanded.

 

[unmerged(14102)]

I think i have got it now, thanks.
One more question: my lumber mill shows, that it's profit is 10$. But if I close it, my overall income will hardly decrease. I am not selling any timber, so in this case it is impossible I make the same money with timber. But what is the cause then?

That is what is called the opportunity cost of a factory in that province. In the game, remember that your POP's have a choice: factory or RGO work. So, before you build a factory, you need to look carefully at the incomce they are making in the RGO. V1.4 now rewards good RGO's quite nicely.

In recent game I played as MEX where I have taken cotnrol of most of North America, I have a number of states [like TEXAS] where in this game, I cannot build ANY ffactory that is more profitable than my RGO's. Why? There are a lot of small POP's in this state, each province has 5 - 12 each of differing culture and religions. Several of the provinces are now oil producing and the price of oil is quite strong in the WM. So building a factory is a bad idea except for the IND score.

 

[unmerged(14102)]

As a personal preference I build factories to supply goods my pops demand. If my pops can't buy it, I supply it. It means that the factories will always make money because my goods will be demanded.

Or at least it makes them happier, a VERY good thing for productivity.

 

[bip]

Ok, i am quite desperate now. Can anyone make it clear please: if I have a lumber mill with 10$ profit and a paper mill with 6$ profit, do I have just to add this values to get the overall profit?

 

[OHgamer]

Ok, i am quite desperate now. Can anyone make it clear please: if I have a lumber mill with 10$ profit and a paper mill with 6$ profit, do I have just to add this values to get the overall profit?

Yes, your combined profit is $16, which is then divided among your pops based on whichever state the factory is in. You then get whatever % tax rate you have set sent to you, plus revenue from tariffs charged on what your POPs buy with their leftover income after you tax them.

 

[bip]

Yes, your combined profit is $16, which is then divided among your pops based on whichever state the factory is in. You then get whatever % tax rate you have set sent to you, plus revenue from tariffs charged on what your POPs buy with their leftover income after you tax them.

But how is it possible that the profit is combined while I am not selling any lumber because it all used to make paper?
So I get less profit from selling one unit of paper then from selling one unit of lumber, right?

 

[Markusw7]

But how is it possible that the profit is combined while I am not selling any lumber because it all used to make paper?
So I get less profit from selling one unit of paper then from selling one unit of lumber, right?

Lumber is being sold to the paper factories. The people in the lumber factories make 10 profit which you tax and the paper mill people make 6 profit which you tax.

 

[unmerged(49082)]

Oh... why should the overall income from both factories (lumber and paper) be 16$, if a can't sell any lumber at all, because it all used to produce paper?
One more question: my lumber mill shows, that it's profit is 10$. But if I close it, my overall income will hardly decrease. I am not selling any timber, so in this case it is impossible I make the same money with timber. But what is the cause then?

So once again:
Let's suppose you produce one unit of timber and the RGO shows £8 profit, lumber mill produces one unit showing £10 profit and paper mill shows £6 profit, all using 5 pops. It means that if you use the initial setup you earn £8 + £10 + £6 = £24 in total. If you put ten pops to work in lumber mill and leave none in paper mill you'd earn £8 + 2*£10 = £28 in total, provided you are able to import the lacking one unit of timber. Opportunity cost for using the initial setup is £4. Now let's suppose you put all fifteen pops to work in lumber mill and are able to import the lacking 2 units of timber. You'd earn 3*£10 = £30 in total, provided that the increased production doesn't decrease market price of lumber and increase market price of lumber. Opportunity cost compared to the initial setup is £6.

 

[bip]

So once again:
Let's suppose you produce one unit of timber and the RGO shows £8 profit, lumber mill produces one unit showing £10 profit and paper mill shows £6 profit, all using 5 pops. It means that if you use the initial setup you earn £8 + £10 + £6 = £24 in total. If you put ten pops to work in lumber mill and leave none in paper mill you'd earn £8 + 2*£10 = £28 in total, provided you are able to import the lacking one unit of timber. Opportunity cost for using the initial setup is £4. Now let's suppose you put all fifteen pops to work in lumber mill and are able to import the lacking 2 units of timber. You'd earn 3*£10 = £30 in total, provided that the increased production doesn't decrease market price of lumber and increase market price of lumber. Opportunity cost compared to the initial setup is £6.

But if I import timber for 5$, then my lumber mill manufactures it to lumber (WM price 15$ - price of used timber 5$ = 10$ profit for me) and then I let manufacture this lumber to paper (WM price of paper 50$ - cost price of lumber 5$ (since i provide it myself, i have only to pay the timber) = 45$ profit). This would be the way in real life(ok, ok, i would have to pay my workers and taxes, and transport etc. ) .
I don't understand how the machanics work in the game. Does the lumber mill sell it's lumber to the WM first so the paper mill has to pay the full price for lumber? It would make sense just adding the profits of all factories then...