Exactly how is production cost tied to market price?

[Prisoner 76561197992841073]

It seems that the cost of producing commodities is tied to the international market price. It was this way in the previous SR games too, but I never understood the exact mechanism behind this.

For some context:

I was a massive ore exporter as Russia, my production costs were around $100 and market price was about $120... at some point the market price got very close to $100, but my costs did not change. I wasn't happy with the margin, so I limited my production significantly so that I exported less, hoping the price would rise. After some time, my production costs shot up to over $300, and so did the market price sitting around to $350 - $370. What is underpinning this? I'd expect the price rise, but not the cost of production to go up.

[ZEvans96]

I'm struggling to understand the economy now as well. I thought I'd slip right into it after years of playing SR. But playing as an economy like France, the production cost and the high end goods is so high that it doesn't seem like it should be able to make a profit.

I'm gonna have to really experiment with the game, because right now I suck at economy.

[BattleGoat Studios]

The economic and resource model is quite detailed, so there are often mechanics going on that may not be obvious. We try to expose all of the source information to the player, but sometimes it's a lot to take in.

First, there is a difference in the mechanics behind a raw material (ie Petroleum, Agriculture, Ore) and a finished good (Consumer Goods, Industrial Goods, Electricity).

The resources at the "top" of the pyramid (Consumer and Military) are the most complex. To take Consumer goods as an example:

Consumer goods will use various raw materials including Rubber, Petrol, and Ore. Consumer goods will also use Electricity, and depending on your region Electricity may be from a hydro dam, or it may use Petrol or Coal. Consumer goods will also use Industrial goods, which in itself will use Petrol, Coal, Ore, and Electricity. You can see all these relationships in the "Supply Chain" interface (lower right, forth button from right).

So, the final cost of a ton of Consumer goods will be dependent on the input source cost of all those raw materials, which may change.

Then how about the raw materials? There is a baseline cost value for items like Ore and Petroleum. That cost will change for each region based on labour costs (the region's average GDP per capita, the unemployment rate, production efficiency and regional efficiency, and so on). There is also an ongoing inflation factor, although that should take a lot longer to notice.

All of that is for the production costs of a raw material. As mentioned, a finished good's price will be affected by all the raw input costs.

The market itself will the fluctuate prices depending upon world supply and demand, and that can be considerable.

You mentioned you're seeing this regarding ore prices. Russia does start out with relatively cheap labor rates, and so that could be resulting in the lower production pricing at the start of the game, and as the economy improves the production prices will too. Compare your GDP/c with the starting GDP/c to see if that's the case.

[Daniel]

Originally posted by BattleGoat Studios:

The economic and resource model is quite detailed, so there are often mechanics going on that may not be obvious. We try to expose all of the source information to the player, but sometimes it's a lot to take in.

First, there is a difference in the mechanics behind a raw material (ie Petroleum, Agriculture, Ore) and a finished good (Consumer Goods, Industrial Goods, Electricity).

The resources at the "top" of the pyramid (Consumer and Military) are the most complex. To take Consumer goods as an example:

Consumer goods will use various raw materials including Rubber, Petrol, and Ore. Consumer goods will also use Electricity, and depending on your region Electricity may be from a hydro dam, or it may use Petrol or Coal. Consumer goods will also use Industrial goods, which in itself will use Petrol, Coal, Ore, and Electricity. You can see all these relationships in the "Supply Chain" interface (lower right, forth button from right).

So, the final cost of a ton of Consumer goods will be dependent on the input source cost of all those raw materials, which may change.

Then how about the raw materials? There is a baseline cost value for items like Ore and Petroleum. That cost will change for each region based on labour costs (the region's average GDP per capita, the unemployment rate, production efficiency and regional efficiency, and so on). There is also an ongoing inflation factor, although that should take a lot longer to notice.

All of that is for the production costs of a raw material. As mentioned, a finished good's price will be affected by all the raw input costs.

The market itself will the fluctuate prices depending upon world supply and demand, and that can be considerable.

You mentioned you're seeing this regarding ore prices. Russia does start out with relatively cheap labor rates, and so that could be resulting in the lower production pricing at the start of the game, and as the economy improves the production prices will too. Compare your GDP/c with the starting GDP/c to see if that's the case.

This made full sense to me. For some reason I always thought Consumer Goods and Industrial Goods to be a completely separate type of good/service from the raw materials, never really thought that they are interconnected and are directly tied to the price of manufacturing of raw materials. Always thought Consumer/Industrial Goods just simply "imported" raw materials to power their facilities for the production of goods.

[Prisoner 76561197992841073]

Originally posted by BattleGoat Studios:

The economic and resource model is quite detailed, so there are often mechanics going on that may not be obvious. We try to expose all of the source information to the player, but sometimes it's a lot to take in.

First, there is a difference in the mechanics behind a raw material (ie Petroleum, Agriculture, Ore) and a finished good (Consumer Goods, Industrial Goods, Electricity).

The resources at the "top" of the pyramid (Consumer and Military) are the most complex. To take Consumer goods as an example:

Consumer goods will use various raw materials including Rubber, Petrol, and Ore. Consumer goods will also use Electricity, and depending on your region Electricity may be from a hydro dam, or it may use Petrol or Coal. Consumer goods will also use Industrial goods, which in itself will use Petrol, Coal, Ore, and Electricity. You can see all these relationships in the "Supply Chain" interface (lower right, forth button from right).

So, the final cost of a ton of Consumer goods will be dependent on the input source cost of all those raw materials, which may change.

Then how about the raw materials? There is a baseline cost value for items like Ore and Petroleum. That cost will change for each region based on labour costs (the region's average GDP per capita, the unemployment rate, production efficiency and regional efficiency, and so on). There is also an ongoing inflation factor, although that should take a lot longer to notice.

All of that is for the production costs of a raw material. As mentioned, a finished good's price will be affected by all the raw input costs.

The market itself will the fluctuate prices depending upon world supply and demand, and that can be considerable.

You mentioned you're seeing this regarding ore prices. Russia does start out with relatively cheap labor rates, and so that could be resulting in the lower production pricing at the start of the game, and as the economy improves the production prices will too. Compare your GDP/c with the starting GDP/c to see if that's the case.

Thank you for the reply, it makes sense however there does appear to be some direct link between market price and production cost, it's as if market price can never exceed 20% of production cost, or vice versa?

Regarding Russia, this change was observed over about 6 months literally after I limited my production. I've had steady growth since near the start of the campaign and hadn't seen such drastic change.

[eric.schoenholz]

Isn't it possible to show more stats in the game? It would be very interesting to see time histories as diagrams of prices, proction rates, gdp and many others. So we can better evaluate what the problem of some changes are. And in a economic simulation it would be very useful. I think the data are existing, so it shouldn't be much effort to realize but it would be a great improvement of the game.

[Chris-BattleGoat]

The game engine does not store historical data. It knows "today" and it knows "yesterday". Storing historical data for hundreds of countries could have massive performance impacts. It has come up as a suggestion before, there is a big thread about it on our development forums. It is a topic we will continue to consider.

[BaMxIRE]

Originally posted by BattleGoat Studios:

The economic and resource model is quite detailed, so there are often mechanics going on that may not be obvious. We try to expose all of the source information to the player, but sometimes it's a lot to take in.

First, there is a difference in the mechanics behind a raw material (ie Petroleum, Agriculture, Ore) and a finished good (Consumer Goods, Industrial Goods, Electricity).

The resources at the "top" of the pyramid (Consumer and Military) are the most complex. To take Consumer goods as an example:

Consumer goods will use various raw materials including Rubber, Petrol, and Ore. Consumer goods will also use Electricity, and depending on your region Electricity may be from a hydro dam, or it may use Petrol or Coal. Consumer goods will also use Industrial goods, which in itself will use Petrol, Coal, Ore, and Electricity. You can see all these relationships in the "Supply Chain" interface (lower right, forth button from right).

So, the final cost of a ton of Consumer goods will be dependent on the input source cost of all those raw materials, which may change.

Then how about the raw materials? There is a baseline cost value for items like Ore and Petroleum. That cost will change for each region based on labour costs (the region's average GDP per capita, the unemployment rate, production efficiency and regional efficiency, and so on). There is also an ongoing inflation factor, although that should take a lot longer to notice.

All of that is for the production costs of a raw material. As mentioned, a finished good's price will be affected by all the raw input costs.

The market itself will the fluctuate prices depending upon world supply and demand, and that can be considerable.

You mentioned you're seeing this regarding ore prices. Russia does start out with relatively cheap labor rates, and so that could be resulting in the lower production pricing at the start of the game, and as the economy improves the production prices will too. Compare your GDP/c with the starting GDP/c to see if that's the case.

This has given me a nice look at the way the economy works overall in game thanks for this.

[Daniel]

To add, if you're every looking to increase market prices, and at the same time have a very large balance of over several hundred billion dollars, you can do an infinite money glitch so to speak; something i found out in SRU and it works to some extent in SR 2030.

1) Make sure you are self sufficient in everything. Preferably, to have the best effect, be top 5-top 10 in exporters of the good.
2) Start stockpiling everything immediately overnight. No exports whatsover, only internal use.
3) Set economy minister to Inflation Control and Increase Revenue.
4) Wait as long as you can until your account goes to 10 billion dollars.
5) Once that has been done, you would've stockpiled a large amount of goods and the market price, due to rapid decrease of supply, would've increased. Sometimes i would start and Oil would be $95, then in 5 months it would be $130.
6) Once you reached the 10 billion mark, export everything to the max potential. You'd use the intraday all time high price to sell all your goods, making like a 20%-40% markup.
7) This works even better if there are wars and you are not looking to do much economically with developments or militarily. Nations get dependent on you in a time of war and all of a sudden you turn the power off. Price skyrockets.
8) And keep redoing that. Within 2 years you would've 4-6X your total current Treasury.

[Prisoner 76561197992841073]

Originally posted by Daniel:

To add, if you're every looking to increase market prices, and at the same time have a very large balance of over several hundred billion dollars, you can do an infinite money glitch so to speak; something i found out in SRU and it works to some extent in SR 2030.

1) Make sure you are self sufficient in everything. Preferably, to have the best effect, be top 5-top 10 in exporters of the good.
2) Start stockpiling everything immediately overnight. No exports whatsover, only internal use.
3) Set economy minister to Inflation Control and Increase Revenue.
4) Wait as long as you can until your account goes to 10 billion dollars.
5) Once that has been done, you would've stockpiled a large amount of goods and the market price, due to rapid decrease of supply, would've increased. Sometimes i would start and Oil would be $95, then in 5 months it would be $130.
6) Once you reached the 10 billion mark, export everything to the max potential. You'd use the intraday all time high price to sell all your goods, making like a 20%-40% markup.
7) This works even better if there are wars and you are not looking to do much economically with developments or militarily. Nations get dependent on you in a time of war and all of a sudden you turn the power off. Price skyrockets.
8) And keep redoing that. Within 2 years you would've 4-6X your total current Treasury.

Hah, I did wonder about doing something similar. Nice to hear that you've put it into practice and it works well, I'll give it a shot too

[pkoko]

Originally posted by Chris-BattleGoat:

The game engine does not store historical data. It knows "today" and it knows "yesterday". Storing historical data for hundreds of countries could have massive performance impacts. It has come up as a suggestion before, there is a big thread about it on our development forums. It is a topic we will continue to consider.

Storing world market price data every week or 30 days is not a lot of data. It will not be a huge performance on modern systems.

[fosk]

Originally posted by Daniel:

To add, if you're every looking to increase market prices, and at the same time have a very large balance of over several hundred billion dollars, you can do an infinite money glitch so to speak; something i found out in SRU and it works to some extent in SR 2030.

1) Make sure you are self sufficient in everything. Preferably, to have the best effect, be top 5-top 10 in exporters of the good.
2) Start stockpiling everything immediately overnight. No exports whatsover, only internal use.
3) Set economy minister to Inflation Control and Increase Revenue.
4) Wait as long as you can until your account goes to 10 billion dollars.
5) Once that has been done, you would've stockpiled a large amount of goods and the market price, due to rapid decrease of supply, would've increased. Sometimes i would start and Oil would be $95, then in 5 months it would be $130.
6) Once you reached the 10 billion mark, export everything to the max potential. You'd use the intraday all time high price to sell all your goods, making like a 20%-40% markup.
7) This works even better if there are wars and you are not looking to do much economically with developments or militarily. Nations get dependent on you in a time of war and all of a sudden you turn the power off. Price skyrockets.
8) And keep redoing that. Within 2 years you would've 4-6X your total current Treasury.

If you want to use glitches, just make USA your ally, buy stuff from them and then sell it back for more money. Easy.

[wven]

Originally posted by pkoko:

Originally posted by Chris-BattleGoat:

The game engine does not store historical data. It knows "today" and it knows "yesterday". Storing historical data for hundreds of countries could have massive performance impacts. It has come up as a suggestion before, there is a big thread about it on our development forums. It is a topic we will continue to consider.

Storing world market price data every week or 30 days is not a lot of data. It will not be a huge performance on modern systems.

nice of you to tell the developer how their engine works

[pkoko]

Originally posted by wven:

Originally posted by pkoko:

Storing world market price data every week or 30 days is not a lot of data. It will not be a huge performance on modern systems.

nice of you to tell the developer how their engine works

I took few college programming courses. Trust me, this will be very easy to implement unless the price is not constant during the day. Even then just take the value at the days end every 7 days or 30 days and store it. It is easy to do and will take less than 1 hr to code.

[wven]

Originally posted by pkoko:

Originally posted by wven:

nice of you to tell the developer how their engine works

I took few college programming courses. Trust me, this will be very easy to implement unless the price is not constant during the day. Even then just take the value at the days end every 7 days or 30 days and store it. It is easy to do and will take less than 1 hr to code.

Again, the developer has stated in this very thread that it is something often requested and something they have discussed at length. The fact that the developer states that the difficultly of doing this is the main reason they have not done it means that your assumption is incorrect.

So unless, your college courses where specifically on the Supreme Ruler engine you do not know how hard or easy it would be and you damn sure don't know how long it would take to code.

[pkoko]

The dev stated that storing the values for every country will take too much data and a huge performance hit. I am stating to only store the world market price. That is something like 8 prices per time period. Not 8 X 190+ countries or ~1500 values per time period.