Saturday, 31 October 2015

True cost of goods

This model is an attempt to analyze the true cost of goods. The current fair trade ratios are solely based on the amount of gold and supply to produce the goods. This is flawed because this assumed gold / supply are worth the same across ages. This is not true because gold / supply are not tradeable and thus they have no universal value. 10000 gold may mean a lot to a bronze age player, but certainly worthless to a modern age player.


The true cost of good must be based on a resource equally scarce across ages. Gold and supply fail that criteria, so are population and happiness. The closest thing that fit that requirement is land. Without very precise analysis of the amount of diamond / medals required to expand across ages, the difficulty to acquire additional land stays roughly equal.

Let's use this as our "base" to evaluate goods. I will define the true cost of goods as: " the size of land to support the continuous efficient production of those goods" By that I mean we do not have any down time to keep producing goods at the 4 hour for 5 or 8 hour for 10 options. Obviously to do that, we need a goods factory of a certain size. We need to have the residential buildings to have enough population for that factory. And I assume that all players will try to keep their population enthusiastic (120% happiness), and as such we need the cultural buildings. We also need the houses and production buildings to produce enough gold and supply to meet the gold/supply input as required for the 4 or 8 hour options. For all these buildings (houses, production, cultural, factory), they need roads to connect them. Beyond modern era, we also need to add the cost to produce the raw materials.


Wow, so that seems like a complicated model. It is, but it is less daunting as it seems. Here is an approximate model:

https://docs.google.com/spreadsheets/d/1mM8fkkUqZWezz3w4jkKCui0ZZei4TpVYgD3QDvCzZ1Q


Let's start with the most independent element - happiness. Col B - E tries to establish the land size to produce 120 happiness (you will see why 120 later). In each age, there are multiple types of cultural buildings. I pick a random one to calculate here. With more effort you can find out which is most efficient to use (and there is indeed a calculation for the efficiency). I will use the same approach for all other building types. Col B is the happiness produced by that building and the size of land needed (col C). To use this building, you would need it connected. So I approximate that as the shorter edge of that building divided by 2(smartest placement would line up a building to the road from the shorter edge). Divided by 2 because usually a road will support 2 buildings connected to it on both sides. If a building needs 2-lane road, do not divide by 2 (because each land pixel is connected to 1 building only). With this calculation, you can see that it takes approximate 5.3 land pixels to produce 120 happiness, as opposed to just 1 land pixel in tomorrow era.

Then we look at the land size cost for having 100 population (col F, H, I, J). Similar calculation with the 1 hour gold producing house in each age (if 1 hour not available, pick another). So to have 100 people, you need 6.8 land pixels in Iron age, down to 1 land pixel in tomorrow Era.

We then need to establish the land size required to produce 1000 gold per hour (col K). So apart from the obvious land size or road needs of the house, we also need to factor in the land size of the cultural buildings need to keep that population happy. So to keep the production of roughly 1000 gold per hour, we need 131 land pixels (to account for the house, cultural buildings and roads) in bronze age, to just 8.6 land pixels in tomorrow age. And you can see why using gold as the basis to evaluate goods value is so flawed!

A similar calculation for supply production. How many land pixels needed to support the production of 1000 supply per hour (col Q). Again I randomly pick one type of production building in each age, and with more work you can see you can find out why production building is the most efficient to use. Apart from the land size and road needs, add in the land cost of the population needed to work the production buildings. In later eras, the production buildings have impact on happiness….as since we already have a clear cost base for happiness, you can easily factor in that happiness cost. So you can see that it takes 152 land pixels to produce 1000 supply per hour in bronze age, but just 10.4 pixels in tomorrow era.

 Finally to the goods itself. Very similar calculations - land size of the factory itself, plus the roads, plus the land cost of the population to work the factory. Slightly tricky with the gold/supply cost. The actual land cost required because of gold / supply are the land pixels needed to produce just enough gold / supply to keep the factory operating efficiently (4 or 8 hours options). With the above calculation, we have normalized to 1000 gold or supply per hour. So we calculate it as (gold/supply requirement for 8 hour option / 8000) * land pixels cost to produce 1000 gold/supply per hour. Finally, add the land cost of the raw material to produce the refined goods. You could also factor in the happiness impact of the factories in later eras. Note that I pick randomly among the 5 different types of factories here, just like other buildings….but with goods buildings, that choice swings the land cost more significantly than with the other buildings. However, to facilitate the general trend, a random choice will suffice for now.

Without further ado, this is the number of land pixels needed to keep a good factory in each era to continuously produce efficiently.

Bronze 42
Iron 42
EMA 51
HMA 56
LMA 61
Colonial 70
Industrial 83
Progressive 95
Modern 143
PM 168
Contem 178
Tomorrow 206

So you can see that really, the land cost to produce the same amount of goods for the first few ages are quite similar and does not warrant the 1:2 ratios across adjacent ages. Some examples like Iron:EMA = 5:4 and  7 industrial goods for 8 colonial age goods. The biggest jump happens around modern era. Roughly 2 modern era goods should fetch 3 progressive era goods.The gap between later ages are actually bigger and thus warrant a bigger ratio than the current fair trade ratios!


Raistlin Magistic from en.forgeofempires.com, Mount Kilmore.