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Cost of change

Author
Severice
The Order Of Asgard
Lord of Worlds Alliance
#1 - 2014-04-30 01:47:55 UTC
I haven't seen anyone ranting/raving about the new production line changes so i figured i'd start.

1. You're adding a rather substantial cost to building effectively out of left field. Whatever the costs are expect the price of ships/produced goods to just completely skyrocket over night by 5-10%. Simply put, additional cost on the producers will be passed on to consumers. This raises the price of the good which 28 days layer will raise the price of the production. Euler's number (e) (2.718) will have a lovely effect on this, so the end result of the production percents over current prices will be something like 5-10% * 2.718 once everything eventually 'settles'.

2. Transparency, with a system like what you've setup it becomes very difficult to figure out what the prices on a build are going to be until your putting in the order. This makes it much harder to predict what prices and costs are going to be. Also the volatility of the price slider will also cause market volatility.

3. Reduced need/use of pos structures. At current all a manufacturing pos does is reduce the taxes which is 10% of the cost. This is a very minimal amount of isk saved compared to cost of operation. This is further compounded by changes being made to BPO copying remotely, and remote job production.

4. Compound changes. These changes do not gel with the changes to copies and a 'desire' to shift production to copies. The cost to make a copy of a BS is in the million isk per single run job, at the cheapest (in a pos) to 2 million per job on the higher end. That's a lot of isk i could save by just building from the BPO infact a lot more than the taxe free building at a pos would save me.

5. Teams are worthless. I haven't read the teams blog yet, but i have a feeling all they're really going to do is work 'faster' for 'more'. Which is going to put them in the same vein as decryptors. Some of them will be used for some jobs. Other will be all but worthless. The whole economy of eve is based on 2 concepts. Conveinence and barrier to entry. Most people go to jita and buy a battleship. They aren't willing to wait 4 hours to build a megathron after buying minerals. People will pay for convenience. As a producer my entire income is baesed of turning minerals into megathrons at the lowest possible % of waste. Time is a completely secondary consideration. ME first then PE. Anything that reduces my ME is a good thing. Things that reduce my PE are good things. Things that reduce my PE while increasing my ME are anathema.

6. Long build concept. Some of cost reduction math is based on the duration of the run. The option is here to reduce the cost by increasing the build time. Will TE modifiers on my BPO's cost me isk because they build faster?
Severice
The Order Of Asgard
Lord of Worlds Alliance
#2 - 2014-04-30 03:01:56 UTC
Also i'd like an explanation on the multi run discount.

As stated you get .99^(number of hours run) as a discount.

So if i'm building a megathron with a manufacturing time of 3 hours 18 minutes i'm getting a .99^(3.3) discount. or for .967 the initial cost.

Lets assume a zero skill toon. using a brand new megathron bpc. that's 5 hours production time. So his second mega costs .99^(5) less. or for .95 of the Initial cost.

My skills are now actively hurting me in terms of cost, as is TE research. If we're assuming my number one concern is cost and not production speed.


Edit: Also i made in error in the calculations/reading/interpretation of BPC costs. I was thinking it was BPO price 2% it's actually the items' cost 2% to make base price. This reduces the cost on battleship copies by 5X or so. Making a megathron BPC 171K or so. This makes posses minimally effective with the new changes but now you're building a LOT more megathrons to break even.
Rowells
Blackwater USA Inc.
Pandemic Horde
#3 - 2014-04-30 04:39:03 UTC  |  Edited by: Rowells
Maybe it's just me but it seems like #2 contradicts #1 statement

E; reread. I was wrong. however, I do believe they menntioned something about seeing costs and requirements in a window before having anything where it's supposed to be
Hesod Adee
Perkone
Caldari State
#4 - 2014-04-30 05:13:08 UTC
Severice wrote:
I haven't seen anyone ranting/raving about the new production line changes so i figured i'd start.

1. You're adding a rather substantial cost to building effectively out of left field. Whatever the costs are expect the price of ships/produced goods to just completely skyrocket over night by 5-10%. Simply put, additional cost on the producers will be passed on to consumers. This raises the price of the good which 28 days layer will raise the price of the production. Euler's number (e) (2.718) will have a lovely effect on this, so the end result of the production percents over current prices will be something like 5-10% * 2.718 once everything eventually 'settles'.


You're missing that the people buying finished goods can only afford to pay so much. Which will be an upper limit to how far prices rise.

Quote:
I haven't read the teams blog yet,

I'd suggest reading it then adjusting your proposal.
Velicitia
XS Tech
#5 - 2014-04-30 11:37:17 UTC
Severice wrote:
Also i'd like an explanation on the multi run discount.

As stated you get .99^(number of hours run) as a discount.

So if i'm building a megathron with a manufacturing time of 3 hours 18 minutes i'm getting a .99^(3.3) discount. or for .967 the initial cost.

Lets assume a zero skill toon. using a brand new megathron bpc. that's 5 hours production time. So his second mega costs .99^(5) less. or for .95 of the Initial cost.

My skills are now actively hurting me in terms of cost, as is TE research. If we're assuming my number one concern is cost and not production speed.


Edit: Also i made in error in the calculations/reading/interpretation of BPC costs. I was thinking it was BPO price 2% it's actually the items' cost 2% to make base price. This reduces the cost on battleship copies by 5X or so. Making a megathron BPC 171K or so. This makes posses minimally effective with the new changes but now you're building a LOT more megathrons to break even.


From reading it, it ONLY applies when you're running multiple ships at once.

I.E. if you're running one (1) Mega, then the multiplier (regardless of skills) is 0.99^0 (or "1"). Yeah, having sucky skills will mean that the second one has a x0.99^5 multiplier (0.950) vs. your 0.99^3.3 (0.967) ... BUT that's only for the install cost (which is currently 1,000 ISK give or take, no matter where you go).

Let's say that you're running a 24 hour job, and the system hard-caps us at 24 hours for a single run (kinda like how these days if 10 runs is 28 days, some hours ... and 11 runs would be 30 days, 1 hour ... you can only install 10 runs). Ignoring all the other modifiers, let's say a base install cost is 10 million

No Skill guy -> can install FOUR jobs
First one --> 0.99 ^ 0 = 1 (10m)
Second --> 0.99 ^ 5 = 0.95 (9.5 m)
Third --> 0.99 ^ 10 = 0.90 (9m)
Fourth --> 0.99 ^ 15 = 0.86 (8.6m)

TOTAL = 37.1 million (or 9.25 million per)


You --> can install SEVEN jobs
First --> 0.99 ^ 0 = 1 (10m)
Second --> 0.99 ^ 3.3 = 0.97 (9.7m)
Third --> 0.99 ^ 6.6 = 0.94 (9.4m)
Fourth --> 0.99 ^ 9.9 = 0.91 (9.1m)
Fifth --> 0.99 ^ 13.2 = 0.88 (8.8m)
Sixth --> 0.99 ^ 16.5 = 0.85 (8.5m)
Seventh --> 0.99 ^ 19.8 = 0.82 (8.2m)

TOTAL = 63.7m (or 9.1 mil per)


but, let's be honest here -- all other things ARE NOT equal. your 10% NPC tax will probably be less (because standings, or at least I hope so), and the maximum "Multple Run Discount" is capped. Your Production Efficiency (called "Material Efficiency" in the blog) skill has some bearing on said cap - so perhaps a PE0/ME0 (skill) toon is capped out at 0.99^0 for everything.

One of the bitter points of a good bittervet is the realisation that all those SP don't really do much, and that the newbie is having much more fun with what little he has. - Tippia

Severice
The Order Of Asgard
Lord of Worlds Alliance
#6 - 2014-04-30 13:59:41 UTC
Hesod Adee wrote:
I'd suggest reading it then adjusting your proposal.


When i started putting this together that blog wasn't out yet. With the new info form it it's still very ? on what the costs of a team will be. (Not the auction stuff, that's whatever, it's the cost per job to use them. as apparently there is a base cost which is ? and a modifier of up to 20% or so on top of it.) so who knows what that end cost will be, but it looks like they'll be a bit of a counter to the approximately 7% install cost, provided you have teams of the right type in your sytem and team for what you're building. Providing they're not prohibitively expensive to get your hands on a decent team. Also creating a system where there isn't a glut of teams or a dearth is going to be an entirely new problem for devs. Good luck. I'm betting it will scale based on how much people are paying for teams to kind of 'guide' them into the right zone.

Hesod Adee wrote:

You're missing that the people buying finished goods can only afford to pay so much. Which will be an upper limit to how far prices rise.


Um... no? Minerals cost X, production costs Y. Cost to build is X + Y. That's what people will pay. there isn't any way around it unless mineral prices drop, which is a totally different speculation.

Velicitia, i agree with your math. However here's the problem, lets talk megathrons, which is my go-to example.

3 hour build time, max number of runs is 10. That's 50 hours, or 2 days 2hours of production

So we don't even get near the production run time cap.

Assume 10mil install cost
Run 1 0.99 ^ 0 = 1 (10m)
Run 2 0.99 ^ 5 = 1 (9.5m)
Run 3 0.99 ^ 10 = 1 (9m)
Run 4 0.99 ^ 15 = 1 (8.6m)
Run 5 0.99 ^ 20 = 1 (8.2m)
Run 6 0.99 ^ 25 = 1 (7.7m)
Run 7 0.99 ^ 30 = 1 (7.3m)
Run 8 0.99 ^ 35 = 1 (7m)
Run 9 0.99 ^ 40 = 1 (6.7m)
Run 10 0.99 ^ 45 = 1 (6.3m)

Total 80mil
8 mil per

Vs my build times of 3 hours 18 min

Run 1 0.99 ^ 0 = 1 (10m)
Run 2 0.99 ^ 0 = 1 (9.7m)
Run 3 0.99 ^ 0 = 1 (9.4m)
Run 4 0.99 ^ 0 = 1 (9m)
Run 5 0.99 ^ 0 = 1 (8.7m)
Run 6 0.99 ^ 0 = 1 (8.5m)
Run 7 0.99 ^ 0 = 1 (8.2m)
Run 8 0.99 ^ 0 = 1 (7.9m)
Run 9 0.99 ^ 0 = 1 (7.6m)
Run 10 0.99 ^ 0 = 1 (7.4m)

Total 86 mil
8.6mil per

That's a 7% difference. That's a profit margin.

If we assume the cap is a 25% reduction i don't even max it out until the last run. While an untrained character has maxed it out at run 7. Then his total cost is 83million. Maybe it's not enough isk to worry about. maybe it just doesn't matter, but i'd like the option of being able to use the cheapest method if possible. I'm not worried about 10 bs taking 33 hours vs 50 hours. To me it's not that big of a deal they don't sell that fast.



Velicitia
XS Tech
#7 - 2014-04-30 14:35:40 UTC  |  Edited by: Velicitia
Severice wrote:

Velicitia, i agree with your math. However here's the problem, lets talk megathrons, which is my go-to example.

3 hour build time, max number of runs is 10. That's 50 hours, or 2 days 2hours of production

So we don't even get near the production run time cap.

(build assumptions, removed for brevity)

That's a 7% difference. That's a profit margin.




You're forgetting there is a "Player ME Skill" caveat to the thing:

Quote:

Multi-run discount: makes each subsequent run of a given job cost a little less than the last, mainly to give another small thing that industrialists can optimize for once they've got the basics under control. For each run, the job cost is multiplied by 0.99 raised to the power of however many hours (or fractions thereof) the job will already have run at that point. This is calculated at installation time and therefore the job doesn't actually change price over time. Rather, we do the math up front. We're looking to cap the maximum bonus of this using the old Material Efficiency skill, which will no longer be affecting waste (see previous blog).



So, it really comes down to this caveat right here. If they don't have any skills trained, then they might end up having an additional five (5) runs where they're gaining zero bonus to the INSTALL Cost. I'm putting it on the back-end to make it more worse for you not having the skills

Megathron sell cost -- 200m (market average over 28 days)
Megathron base install cost = 200m * (square root of the % of actual build time in that system over the last month). To get 10m here, % build time has to end up at 0.5%.



so their math (Time only) is
1 - 10m
2 - 9.5
3 - 9
4 - 8.6
5 - 8.2
6-10 - 50m

total is 95.3 installed (9.53 per).

Other costs that will matter -- (pulling them outta the devblog)

Team - not using, so modifier of 1.00
Station - 0.75
Multi Items - varies, minimum 6 at x1 (due to no ME skill*)
Taxes - 10%

So, that means, for our no skill newbie he's averaging out at 7.8 million per ship just to install the ship (total cost 78.6m installed). On the other hand, you're installing the job for 7.1 million (total cost 71.3m installed).

Furthermore, they're going to have the 11% BPO Material Waste to contend with (again, assuming I'm understanding the thing right).


*NOTE -- this is just inferred, and not sure if that's how it actually works.

One of the bitter points of a good bittervet is the realisation that all those SP don't really do much, and that the newbie is having much more fun with what little he has. - Tippia

Ulthur Ud'raan
Spelunker solitude
#8 - 2014-04-30 14:44:38 UTC
Also of note, if you've followed all the industrial devblogs, is that you can drop a bpo/bpc into the industrial interface, even if you don't own them, and see what your estimated manufacturing cost will be. This means you can browse markets and contracts, find the stuffs you want to builds, drag n drop, and get a fairly close estimate using all the aforementioned maths. If you don't like what you see, move to another system, rinse and repeat.
Creedeth
New Eden Trailer Park
#9 - 2014-04-30 14:49:40 UTC
Ulthur Ud'raan wrote:
Also of note, if you've followed all the industrial devblogs, is that you can drop a bpo/bpc into the industrial interface, even if you don't own them, and see what your estimated manufacturing cost will be. This means you can browse markets and contracts, find the stuffs you want to builds, drag n drop, and get a fairly close estimate using all the aforementioned maths. If you don't like what you see, move to another system, rinse and repeat.

Ninja producers, they are so annoying. We need to do something about them. ;)
Severice
The Order Of Asgard
Lord of Worlds Alliance
#10 - 2014-04-30 15:02:01 UTC
I'm trying to work with the numbers i have. They haven't said anything about what the differences the skills will make, but industry level III is required to train Material Effeciency, so there is still an 8% build time difference, and the TE that will be on all my prints i already have. It's a little irksome is i can' dial them down to get on par with people that didn't train industry to V., or have fully TE'd blueprints.

Ulthur, that's the crux of the worst part. I need an interface window to let me sort by lowest production costs by system by sec status. I'll also need a sortable window for teams, so i can find the best active teams, in the best systems so build the lowest cost items. otherwise i'm just building in the dark, playing a game of whack-a-mole.



Velicitia
XS Tech
#11 - 2014-04-30 17:21:30 UTC
Severice wrote:
I'm trying to work with the numbers i have. They haven't said anything about what the differences the skills will make, but industry level III is required to train Material Effeciency, so there is still an 8% build time difference, and the TE that will be on all my prints i already have. It's a little irksome is i can' dial them down to get on par with people that didn't train industry to V., or have fully TE'd blueprints.



Not sure what you're on about here -- having no (or low) Material Efficiency skill means that you get fewer runs that have reduced startup costs ... and really, I was doing a 1:1 run/level thing because it made sense for the numbers at the time.

For all we know, it could be 20%/level.

One of the bitter points of a good bittervet is the realisation that all those SP don't really do much, and that the newbie is having much more fun with what little he has. - Tippia

Katherine Raven
ALTA Industries
Intergalactic Conservation Movement
#12 - 2014-04-30 19:38:07 UTC
Severice wrote:


3. Reduced need/use of pos structures. At current all a manufacturing pos does is reduce the taxes which is 10% of the cost. This is a very minimal amount of isk saved compared to cost of operation. This is further compounded by changes being made to BPO copying remotely, and remote job production.



With the massive increase in station manufacturing costs, I don't see how you think POS' will see reduced use. If anything, people will want to move their operations into a POS to avoid the increasing manufacturing costs. You still get the benefits of teams, and you don't get affected by price scaling from crowded stations.
Severice
The Order Of Asgard
Lord of Worlds Alliance
#13 - 2014-05-01 13:52:56 UTC
Katherine Raven wrote:

With the massive increase in station manufacturing costs, I don't see how you think POS' will see reduced use. If anything, people will want to move their operations into a POS to avoid the increasing manufacturing costs. You still get the benefits of teams, and you don't get affected by price scaling from crowded stations.


That wasn't how i interpreted the way pos manufacturing worked at all. My understanding is that pos will charge all the same numbers that a station does with the exception of of taxes, which the owning corporation can set.
Sigras
Conglomo
#14 - 2014-05-01 15:40:38 UTC
Severice wrote:
5. Teams are worthless. I haven't read the teams blog yet,

credibility == shot