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If you know you are going to change what factories produce constantly you need to go with the dispersed tree for the retention bonus.
The 1943 tech flexible line should always be taken no matter which tree you chose. Simply because at that point you will be spending xp to change models.
Also do not forget to take the equipment conversion techs to speed up production of new variants of things you already made.
Edit: i think it might be because of war and loss of equipment i suppose.
The problem is you. Every time you tell a factory to produce something different it loses production efficiency.
Think about a real factory, you have a bunch of workers that make Item A and special machines to make Item A. After a while they get good at doing it. Now all of a sudden you take the same factory and workers and tell them to make Item B which means new machines and techniques, so they have to learn all over.
The production retention in the dispersed tree gives a bonus to how much efficiency you lose when constantly changing items produced. This is meant for little countries (not majors) simpyl because they do not have the land space for a lot of factories.
Here is an example of what you need to do is devote X amount of factories to each item you need to produce. For instance if you wanted to produce infantry that is 7 infantry 2 arty, and 2 supports then you want to be using 2 factories for rifles, 2 for arty, and 2 for support equipment.
Now what you can do is adjust a couple factories here and there as you over produce etc. You never want to do what you were constantly doing.
Sometimes it's better to just keep on producing improved, older equipment than to switch to the new type immidiately. It happened historically too, for example with the Panzer IV - Panther. It couldn't afford to switch because it would have interrupted the supply stream and led to a collapse of the tank divisions...
As far as I know only big landed majors like USA and USSR can afford dispersed industries. Concentrated industries is for small nations because it allowes them to build more factories in every region.
Any specific numbers could be misleading but for ecample infantry support equipment or motorized are things that need coupel of factories for make the rpoduction of new unit but not so much to replenish loses - so with small/medium army there is often enough to put something like 5 military factories there but once your units in production have all needed just put it down to 1-2 to continue production in much smaller scale.
Rest comes with experience I would say.
Actually the two trees are totally different.
One has a higher production output, but is more vulnerable to bombing. Easily countered by having an air force and anti-aircraft. This include shipyards.
The retention tree has a lower output, but is less vulnerable to bombing.
While it does not seem like much, but it is if you are a major and using like 20 factories just to produce one item. When you are playing the Chinese countries where manpower is like unlimited you aint ever going to stop producing rifles or infantry units, so using retention really aint a good use.
There is no magic number. Simply because demands and output are going to be fluid. If your stability drops so does your production, lose a territory the same thing. The same occurs for losses and new unit production. You could be producing just fine then the next unit starts in queue and you need say 3k rifles for reinforcements. You should only worry about changing what a factory produces or number producing when you have an abundance. Even then your estimate can still be off because the amount in your stockpile can drop quickly when you stop producing.