These forums have been archived and are now read-only.

The new forums are live and can be found at https://forums.eveonline.com/

Science & Industry

 
  • Topic is locked indefinitely.
 

Discussion/newb-help – How to evaluate invention time in T2 profit cal
Author
Previous Topic Next Topic
Mino Adria
Convenient Alternative Storage
#1 - 2015-01-12 13:21:56 UTC
Hi!

TL;DR:
How should I/do you evaluate the time for invention in profit calculations for T2 production. Should I include the time for copy/invention in ISK/h calculations? What is the opportunity cost on my research slots?

Rather new here. I resubbed after the “This Is EvE” trailer and what started as a search for a semi-passive income to fuel my pewpew main ended in a joyful dedication of my game time trying to learn the mysterious ways of the industrialist Big smile so now my alt is my main, sort off Cool

I’ve used the IPH tool and made profitable T1 runs slowly accumulating capital, now I’m homing in on T2 manufacturing.

I’m trying to get my head around how I should evaluate the invention time in my calculations. When I do T1 production I simply look at the ISK/h as I want to utilize my slot efficiently and work in 24h batches.

Running the numbers for T2 I’m unsure if I should include invention time when comparing ISK/h. Including the cost is given of course. So this question is about effciency and oppertunity cost.

My reasoning is this. I can invent and manufacture at the same time as they use different job slots, and in many cases (depending on skills/decryptor) the invention time is less than the manufacturing time. Meaning I can feed 1 manufacturing slot with 1 inventions slot essentially setting up a production chain working on the same schedule.

Right now my research slots sits unused a lot of the time, or I throw in my less used T1 BPO for ME/TE research. What is the opportunity cost when using a research slot? I know I can probably run both invention, copying and research for profit (like researching ME/TE 10/20 and selling the BPO on contract or start selling BPCs). I’ve done some rough napkin math and seen figures all over the place for research having ISK/h of -15k to +200k but haven’t really checked the contract market enough to know how realistic any of it is.

And this brings me to my question. If I currently don’t have a solid use generating a respectable ISK/h for my research slots, should I then include the invention time in ISK/h calculations for T2 manufacturing? From a manufacturing slot perspective it seems natural to compare ISK/h and slot efficiency disregarding the time for invention (in reality I also look at ISK per 24h as few T2 BPs line up with my “once a day” 24h schedule). Should I instead evaluate research slot efficiency separately and find out the opportunity cost of doing T2 invention instead of something else (like copying for example)?

I’m not looking for anyone to hand over their secrets, but some direction in the form of “Yes, BPO research can be very profitable and surpass T2 production in ISK/h” or “No, I buy my T2 BPC from contracts” would be helpful. I understand that the answer in the end is “It depends” but I would like to know on what? What factors should I be considering and what should I learn more about?

Thanks in advance!
350125GO
Sebiestor Tribe
Minmatar Republic
#2 - 2015-01-12 14:28:54 UTC
How much time are you dedicating to industry?

You're right in trying to maximize your lines, but on some items, the difference in invention time is not going to change if you can build and sell the t2 item for a profit. Sure you include the cost of invention into your cost of manufacturing, but if you're only doing this on one character it seems a bit much to calculate that into your isk/hr numbers, unless of course you really like creating formulas.

In my opinion, isk/hr is not the end all, especially when you're starting out in industry. Depending on what your capital is, you may need to focus on lower margin, higher volume items first until you can build up the capital to be able to sit on lower volume items for a while.

You only make the profit when the item sells. Isk/hr doesn't take into account how long the item is on the market.

You're young, you'll adjust. I'm old, I'll get used to it.
Mino Adria
Convenient Alternative Storage
#3 - 2015-01-12 14:54:56 UTC  |  Edited by: Mino Adria
350125GO wrote:
How much time are you dedicating to industry?

You're right in trying to maximize your lines, but on some items, the difference in invention time is not going to change if you can build and sell the t2 item for a profit. Sure you include the cost of invention into your cost of manufacturing, but if you're only doing this on one character it seems a bit much to calculate that into your isk/hr numbers, unless of course you really like creating formulas.

In my opinion, isk/hr is not the end all, especially when you're starting out in industry. Depending on what your capital is, you may need to focus on lower margin, higher volume items first until you can build up the capital to be able to sit on lower volume items for a while.

You only make the profit when the item sells. Isk/hr doesn't take into account how long the item is on the market.


Right now I'm dedicating all my game time to EvE industry Big smile I kind of stumbled into it by accident but really like playing EvE as a Tycoon game of sorts. I like math-problems and that is how I play EvE right now.

This is my Indy alt on my second account. I have an old main account skilled for PvP/Exploration. Currently I'm using one of the "free 20 Days" to skill an indy-alt on this account, I will probably do it on the main account too as I haven't figured out a better use for it.

I'm just starting up and building my capital from scratch, so right now it is peanuts. On my main I have 10 figure number staring at me in the Wallet, but I don't want to use that right now for two reason. 1) I'm not sure what I'm doing and might screw up losing it all 2) It wouldn't feel like as much as an achievement taking that much seed money as it is bought with PLEX (last time I played I only PvPed in RvB and bought a set off PLEX on sale to fund it).

My strategy right now is to go for the highest ISK/h I can get in T1 with my current capital. I invest in new BPOs that have somewhat short ROI time when I can afford "BPO price + first run" without risking all my capital. With my current portfolio I accumulated enough ISK over the last week to move away from utilizing all my funds in one 24h batch. So I’m starting to look for the next better BPO to invest in. I’m also starting to run into the problem you mention about unloading stock. So I either have to switch tactics or have a bigger buffer.

But my question, well if we are just talking profit-% time isn’t really a factor at all is it Blink But over time, taking opportunity cost into it, profit over time is the better metric isn’t it? And as such I’m unsure of how to evaluate invention time (not cost, cost need to be part of the calculation of course). So do you have any insight on the opportunity cost on my research slots? What could I be doing with them other than T2 invention that would motivate taking the time into efficiency calculations?
Pickleback
Federal Navy Academy
Gallente Federation
#4 - 2015-01-12 16:37:57 UTC
Check Fuzzwork blueprint calculator. With a little checking with Eve-Central, you can get a very good approximation of what cost and prices you're looking at. I've used this for years with great results.
350125GO
Sebiestor Tribe
Minmatar Republic
#5 - 2015-01-12 19:49:19 UTC
Pickleback wrote:
Check Fuzzwork blueprint calculator. With a little checking with Eve-Central, you can get a very good approximation of what cost and prices you're looking at. I've used this for years with great results.



Yep start with Steve's site. Part of what I was getting at is that with only one character doing this, you're more likely spending time acquiring materials and selling goods than the actual research/invention/manufacturing.

I think there are standard ratios for how long it takes to invent something, e.g. mod is x1, frigate x2, cruiser x3, etc.

If you figure that out or find where it was originally posted (Chribba's eve-search.com is likely where to find that) you can then take it into account when you look at profit margins, but at the level you're doing things you may be overthinking at this point.

http://eve-search.com

You're young, you'll adjust. I'm old, I'll get used to it.
Bad Bobby
Bring Me Sunshine
In Tea We Trust
#6 - 2015-01-12 19:55:39 UTC
350125GO wrote:
but at the level you're doing things you may be overthinking at this point.
Working it all out is the fun part though.
Mino Adria
Convenient Alternative Storage
#7 - 2015-01-12 22:09:38 UTC
350125GO wrote:
Pickleback wrote:
Check Fuzzwork blueprint calculator. With a little checking with Eve-Central, you can get a very good approximation of what cost and prices you're looking at. I've used this for years with great results.



Yep start with Steve's site. Part of what I was getting at is that with only one character doing this, you're more likely spending time acquiring materials and selling goods than the actual research/invention/manufacturing.

I think there are standard ratios for how long it takes to invent something, e.g. mod is x1, frigate x2, cruiser x3, etc.

If you figure that out or find where it was originally posted (Chribba's eve-search.com is likely where to find that) you can then take it into account when you look at profit margins, but at the level you're doing things you may be overthinking at this point.

http://eve-search.com


Thanks to both of you :) I do use http://eve-industry.org/ http://eve-cost.eu/ www.fuzzwork.co.uk and http://sourceforge.net/projects/eveiph/ to make calculations.

I'm not sure if I was unclear in my question. I'm not having trouble calculating the actual invention time. My questions is, how I should view the opportunity cost of using a reserch slot for invention, and if that cost should come into consideration when comparing efficiency (ISK/h) of manufacturing lines?
Mino Adria
Convenient Alternative Storage
#8 - 2015-01-12 22:23:31 UTC
Bad Bobby wrote:
350125GO wrote:
but at the level you're doing things you may be overthinking at this point.
Working it all out is the fun part though.


I couldn't agree more! My hope for this thread was to get some insight from all you market/industry vets, get a window into your way of reasoning and learning from it :)
Moac Tor
Cyber Core
Immediate Destruction
#9 - 2015-01-17 19:45:13 UTC  |  Edited by: Moac Tor
It depends on how valuable your research slots are to you, and so it is relative and there is no absolute answer.

If you are using a single character then with 11 slots on each you would be looking at a 50/50 ratio between manufacture and invention which makes things fairly simple. Some T2 items will be invention slot limited and others will be manufacture slot limited, once again there is no hard and fast rule, it all depends on what you are making. Again this can be further modified by decryptors. You then also need to take into account the opportunity cost of other research activities such as ME TE and Copy research which you could be doing.

Every industrialist makes their own judgement call on how much their lines and time is worth. My advice is to simply work out your profit per invention slot and profit per manufacture slot for every item you are looking at making and that should give you enough information to make an informed choice based upon your perceived value of each slot.