W3C - Corporations Profitability & Purchasing of Raw Materials

All corporations use raw materials in the production process and most of them use the automated procedure to purchase these materials when the stock in the corporation is low. Some corporations have setup contracts to purchase the raw materials and receive monthly deliveries as specified in these contracts.

Corporations can control the quality of raw materials they purchase automatically on the market. The command to set the required quality is in the corporation menu and also on the corporations page.

Purchasing materials at a very high quality will increase the cost of raw materials for the corporation. It will also increase the quality of the product that is produced by the corporation.

Purchasing materials at a very high quality may however reduce the profit of the corporation because the quality increase of its output will not be large enough to compensate for the increased cost.

The return on investment depends mainly on the quality of the corporation itself.

For state and private corporations that are upgraded to a quality level of 200, it does not make sense to purchase raw materials at a quality level above 170.

Public corporations can upgrade to a higher quality (225). Raw material quality can be limited to 150.

Contracts cannot be controlled in this way. When you contract to purchase materials, you purchase what the other party can produce and you get whatever quality they deliver.

We have recently looked into corporations and have seen that many of them purchase materials at a higher quality than needed and as a result, they are less profitable.

When the quality of raw materials that are purchased by the corporation is changed it will not automatically change the quality of materials the corporation has in stock.

Purchases of materials after the change will be around the requested quality. They may differ due to availability constraints on the market. When these materials are purchased and added to the stock of the corporation, the quality is averaged (weighted average). After some time, the quality of materials the corporation has in stock will change gradually and approach the requested level.

"For state and private corporations that are upgraded to a quality level of 200, it does not make sense to purchase raw materials at a quality level above 170. "

ASQ = (x* PQ of x) + (y * PQ of y) + (z * PQ of z))/(x+y+z)

x,y,z represent different supply product monthly usage. PQ is the product quality of x,y,z.

Final Output = (1+(0.01*( ASQ - 100)/2))* Corp Upgrade Quality * 1.02

If I was to set supply quality to 170, I wouldn't be reaching the maximum finial output quality would I? It's just works out to be better in terms of cost?

Doesn't manually setting of supply quality damage high quality output demand and will high quality products become less demanded?

If so, how do you make 170+ quality corp suppliers more appealing to human players?

Isn't quality of produced product a function of supply quality increased with the factor of quality upgrades?

Also it is very rare that you will sell a product on the world market at over 2.96 (296Q) times the market price. So no point in making higher qualiy unless you have a reason for your own supply.

The policy regarding corporation quality is a bit of a mess in my opinion.

I've argued before for different stages of the production to have different quality levels, so that all corporations and are advantaged by top quality supplies.

This mean there would be a hige demand for top quality goods and not leaving them out there in the ether to be automatically reduced, and there'd be an advantage in common markets and forming partnerships.

I urge a clear path for quality in corporations.

So this makes CEO quality advantages even less attractive and less profitable. Its already fairly difficult to turn a profit.

Glad I went with state run corps with asq contracts

Well, no, not quite ragingpencil, because with a higher available product quality upgrade in the equation, the quality of supply can be reduced to achieve the same output. Hence a savings in expense.

I stand corrected

Thank you.

If your interested, here is what i pulled out for a corp that produces Advanced Quality Products.

Both Corps will output 296Q product.

A: State Corp - 200Q with 190Q supplies
B: CEO Corp - 225Q with Q158 supplies

Both corps will output 296Q product

	Monthly Use	Market $	A	B
Books And Newspapers	50,000	1,535	$145,825,000	$121,265,000
Computers	100,000	2,719	$516,610,000	$429,602,000
Electric Power	1,000	143,785	$273,191,500	$227,180,300
Electronic Components	250,000	1,523	$723,425,000	$601,585,000
Factory Maintenance Units	96	3,720,000	$678,528,000	$564,249,600
High Tech Services	112,500	1,045	$223,368,750	$185,748,750
Household Products	40,000	9,855	$748,980,000	$622,836,000
Services	50,000	1,055	$100,225,000	$83,345,000
		Total	$3,410,153,250	$2,835,811,650

0.6B a month saving for CEO corp vs State.

Obviously doesn't compete with state run manual contract as per below but still a solid saving

C: 200Q state run corp with Books and Newspapers, Computers, HTS, Services contracted to meet quality requirements below. The rest are brought at 100Q off world market. Supplies average 190Q

			Quality	C
Books And Newspapers	50,000	1,535	296	$227,180,000
Computers	100,000	2,719	230	$625,370,000
Electric Power	1,000	143,785	100	$143,785,000
Electronic Components	250,000	1,523	100	$380,750,000
Factory Maintenance Units	96	3,720,000	100	$357,120,000
High Tech Services	112,500	1,045	296	$347,985,000
Household Products	40,000	9,855	100	$394,200,000
Services	50,000	1,055	296	$156,140,000
				$2,632,530,000

All calcs are assumed to be at current base market + quality. Let me know if and where i missed something

If you have the time to manage your CEO contracts manually...

D: 225Q CEO Corp with 158Q supply average. Product output is again, 296Q. Who has the time tho right?

			Quality	D
Books And Newspapers	50,000	1,535	175	$134,312,500
Computers	100,000	2,719	100	$271,900,000
Electric Power	1,000	143,785	100	$143,785,000
Electronic Components	250,000	1,523	100	$380,750,000
Factory Maintenance Units	96	3,720,000	100	$357,120,000
High Tech Services	112,500	1,045	296	$347,985,000
Household Products	40,000	9,855	100	$394,200,000
Services	50,000	1,055	296	$156,140,000
				$2,186,192,500

whats the point of making these contract anyway. When you upgrade they become high quality. I'd just soon buy everything at 155 Q

You need to own the corp you contract to obviously and you generally only to contract the max so you don't need to worry about '175Q' as above. I wouldn't stop upgrades just to reach 175Q. Just showing what is possible.

I only contract 296Q as my CEO only produce max of 296 anyway. If your corps produce 300+ then account for that in calculations.

it's pretty easy. Just use common market.

it's like FMU. if you don't buy 100Q FMU your nuts. just buy with CEO/Country and sell back to corps at 100Q. saves 200M a month or more and takes 1 min.

I do have a question regarding ship based cruise missile corps... there is no way to have them be profitable even when you direct contract them to another country...No matter how high of a price you set for them, the corp will always stay in the red. How come? The market base price says its 14M per missile, even if you sell them at 200% of base price with quality added, still doesn't make a dent in cost. Does anyone have this problem? If not, what settings are you using...tried every reasonable setting I can think of and no luck

$14M per missile is really low, I remember them being like $70M each at one time.
The market was oversupplied and price fell.

~BTW, state corporations almost always suck in comparison to private ones. Take a look at fixed property costs :S

What the GM needs to do is find a median. CEO get ripped off much more then states. What they might want consider is few things.

CEO should have a higher rate of base production
States make 21M oil CEO should make 23M(10% more)

States should have to pay "Fixed Property Cost" that's just the government paying themselves for a location they own and do maintenance on.

The CEO resource fee should drop from 36% to 25% or lower. Then from there Taxes should take over. You figure a CEO highers housewives/disabled(who just take up SS otherwise) and pay them a salary, plus higher others, plus pay taxes, plus pay a resource fee, and pay fixed property fee.

CEO should be rewarded if they hire X amount of disabled or housewives(maybe more production). Give CEO something more to do.

Also as for cost weapons in the space market need to be sold on contract for the base cost the game gives. Right now a Crusie missile corp on LU sells 240missiles for 2.5B a year. The FMU ALONE cost more. Plus as stated 600 missile are needed to destroy a target Space sold weapons/ammo should prob make a bit more.

Couldn't agree more.