Architect Archive
Thread: Actual Cost per respource
Never mind...
For you, that is probably correct, mine cost a little more.
Remember to factor in overhead at the time you set your product price. There is no point in factoing overhead into the base price of a resource. ( more math than I am interested in and totally meaningless ) factor overhead into the final price of a finished product along with the base resource cost.
Overhead includes re-deeding harvestors, your own house costs, personal costs, tipping of doctors for wounds you recieve while trying to empty your hoppers ( chuckle ) etc etc.
A product cost = Base Resrouce cost + Overhead divided by how many you sell in a period of time + Your profit margin.
One poster is correct that I often extract reserouces at 40-60%, sometimes I re-deed and get a lot better then that, but I have found that 40-60% is enough for me to maintain a good margin and a very competitive price.
Dayln wrote:
I get it that you dont understand overhead and how it is best applied to product pricing, you dont have to tell me again.
Product pricing? I thought you were calculating resource costs. I mean thats what the thread subject and your original post said at least. Maybe you want to take a minute and think about what you are trying to do just to be certain. If you meant something other than what you said I guess there's no harm in that, but if you are still under the impression that you are discussing resource costs then clearly you are not the businessman you've convinced yourself that you are.
Since you seem to be having a serious problem understanding, I'll make this as clear as possible. To calculate resource costs you must include ALL associated costs. Until you include redeeding and time spent you are merely pulling numbers out of thin air.
I have no problem understanding.... you seem too, but maybe I am being a little harsh ( you too )
I understand that you want to factor every thing under the sun into the base resource cost. I dont, I could care less about that. I am interested in the BASE resource cost, and I factor overhead into the final price. If you want to figure it differently go ahead, I wont stop you. But I am interested in this only from a proper product pricing standpoint.
You want to try and factor tipping of doctors into your resroeuce cost... go ahead ( chuckle )
But I call resource costs what they are, and overhead is calculated seperatly and much more acuratly ( espically since it is variable from week to week ) as overhead and factor that into the final product price.
Well, your understaanding of overhead vs material costs is flawed. No business I know of ( and I know many ) calcualte it the way you are trying too.
How do you calculate re-deeding when you dont redeed every time into a resreouce cost? Do you estimate? Do you guess? How do you calculate other variable costs?
I dont know what you do, I can tell you want I do.
I know for a fact what last weeks overhead was becasue I know what I had to re-deed and what I did not.
That fact goes into my prices, not some guestimation of avrage factored into a resource cost.
There is a difference between the two. My way assumes nothing ( until a shift changes the % ) your way guestimates.
Now , who was flawed?
You probably should compare your revenue over time with that of other professions that are not directly resource dependent, like combat.
How much time does it take you to manage you harvesters? This includes pull, survey, place, and visit time.
if you take this time and compare it against moderate destroy missions at the same level as you are a crafter and their money/time you will have an idea of what it is "costing" you for you time. After all you could be making that money doing destroy missions. Of course combat classes have costs too (stims, weapons, armor) so you can probably take 25% off the top for overhead in those classes.
Add that "cost" to your total harvesters costs and divide it by the amount of resource you pull in.
That will give you a better idea of the real cost of harvesters by factoring in your time.
I am currently costing my time at 10,000cr / hour. That is what I charge people for my time if I simply craft items with their resources. I figure I could probably make that at least that as a master level BH or Pistoleer and I am probably low balling it.
In any case the argument remains the same, architects charge so amazingly little for their craftables and time it makes me want to cry...of course I do not make many installations for people any more so I am crying a lot less and for some reason I am actually doing better financially not making architect stuff for people than when I was doing that regularly.
Interesting....
Dayln wrote:Well, your understaanding of overhead vs material costs is flawed. No business I know of ( and I know many ) calcualte it the way you are trying too.
How do you calculate re-deeding when you dont redeed every time into a resreouce cost? Do you estimate? Do you guess? How do you calculate other variable costs?
I dont know what you do, I can tell you want I do.
I know for a fact what last weeks overhead was becasue I know what I had to re-deed and what I did not.
That fact goes into my prices, not some guestimation of avrage factored into a resource cost.
There is a difference between the two. My way assumes nothing ( until a shift changes the % ) your way guestimates.
Now , who was flawed?
Your methodology is flawed, but I won't judge you as a person because of it. If you want to calculate some number that makes you happy you are spot on. If you want to calculate resource cost you'll need to include all associated costs. There is no other method to arrive at anything approaching an accurate figure and as you can clearly see, the answer depends on the specific period of time involved. No guesstimations here, only hard data analysis which you can only do if you include all of the data.
If you use only a week to gather data you will have an accurate figure for that week which will have no real validity for the following week. No matter how large your data set it will not give you an exact figure for future time periods, but the larger the data collection period reviewed the closer you will come to an average figure with some validity. Which of course will still mean little over a short term period, but if you use a resource based pricing scheme at least it will give you a baseline on costs to work with.
I think you may be trying to oversimplify your calculation at the cost of anything approaching accuracy. Perhaps its your extensive business knowledge which is getting in your way and preventing you from seeing how illogical it would be to present partial data as complete. Lord knows I've seen an awful lot of business folks jump to illogical conclusions over the years so you aren't alone there.
Errgh, time spent to build a house is tiny. A couple of clicks. Give to factory. A couple of more clicks and you're done.
So the biggest time spend is maintaining the harvestor. If you're good, you know exactly when it shift (it's been predictable since the last patch), so you run out once, drop in enough money and power for the duration until shift. Then run back out when it shift to retrieve resources, redeed, and restart mining. That'll take all of 1 hour, maby 2 hours per week. With 4 partners, one can build about 4 houses per day at a net profit of 236k per week, or 236k per hr. So that beat a combat profession rate of 10k per hour.
LOL,
You explained why mine is accurate very well. Let me repeat... where is the flaw?
I calculate base resource cost ( including the cost of power )
I calculate the overhead for the previous week ( I do this weekly as it fluctuates ) By the way I also emptied the hopper during this same period of time it strikes me, so my was is more accurate then I even thought it was.
I factor both of those into my finished product price. My profit margin fluctuates slightly with the changed % of resourses available and my shifting overhead.
Tell me how you would do it that is just so much more accurate then every other business in the country. You do realize I hope that every business in the country does indeed factor overhead separately than material prices right?
Overhead includes the cost of the extractors ( initially my margins were quite low, same as with most businesses, in fact most are negative for years ) re-deeding ( I think of it as re-tooling ) My own house, and my own personal expenses including tickets to other planets. And any other expenses I might incur in the process of the business.
I am all ears. Maybe you can teach the rest of the country how to do business too! I am not stating something new here, I thought I was being rhetorical, this is really standard elementary stuff.