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Tuesday, December 23, 2008

And I run the numbers on Tremor S

Well those of you who like numbers should like this post. The rest of you should run screaming into the night.

Right onto those who are left. As you know I've been slowly getting into Invention and T2 manufacture lately. After goofing rather radically on my first invention attempt and ending up with rather expensive ammo, I'm currently running a MAX run BPC Invention attempt with Carbonized Lead S BPCs. This will lead me to some Tremor S BPCs on each success. With those it will be nice to know exactly what my results and manufacturing costs will be and what the invention costs tagged on to the manufacture will be. So first the invention.

step 1: Get a Max run copy. I made 10 copies of my Carbonized Lead S BPO. Cost per copy: 24561.71 (note that it would probably have been lower had I been using a tower - a fully occupied tower is cheaper than high sec research and copies - trick is keeping it fully occupied to justify the fuel use).
step 2: Acquire datacores. Well I already had these from some research agent and exploration results but you price them at what it would cost you to buy them or what you could sell them for. So 245000 isk for the Nuclear Physics Datacore and 315000 isk for the Rocket Science Datacore. Your area may vary.
step 3: run the invention jobs. Costs 10508.73 isk for me. Again a tower would be cheaper if it was in constant use and especially if the ME research was bearing the lions of the fuel costs. The raison d'etre of high sec towers due to the serious over use of ME slots. It is justifiable to allocate the lions share of costs to ME research on a multi-use tower. If you go way back to when I was running a tower for the alliance as a break even proposition I charged way more for ME slots than for the other slots. Most research corps do.

Total cost for one invention attempt to get a Tremor S BPC with ME-4 and PE-4: 595 070.44 Isk. Now comes the tricky part. The percentage chance of success is known. Sometimes you'll get lucky and get more successes than you expect sometimes not. But this can skew costs radicaly if you try taking it into account by batch. In my case I prefer to look at it as the costs will tend to line up with the given success ratio over the long haul. So what I prefer to do is Prorate the invention costs on a per T2 BPC basis based on the %chance of success. In the long run the lucky runs will balance out the unlucky runs so this is just a statistical way of spreading the invention costs around the BPCs. Others may like to price this on a batch basis and go with the successes of that particular batch. Whatever works for you.

In this case my success chance was 48.26% So this works out to 1 233 051.06 Isk per 10 run Tremor S BPC. Or 123 305.11 Isk per run in invention costs (on average). Since there are 5000 rounds per manufacturing run this works out to 24.66 Isk per round in invention costs (before we make a single round).

Now on to manufacturing.

For this I'm simply going to cut and paste part of my spreadsheet.

Costing calculations

Here you can see the quantities and values I assigned to each of the materials. The T1 minerals are based on Metropolis prices. The complex materials are based on the price I paid for the batch I bought that will go into this. The cost of the R.A.M. is based on what the 10% sales point on one made by myself would be. So the materials and manufacturing costs of Tremor S from a ME-4, PE-4 BPC work out to 30.84 Isk per round. When added to the invention costs per round and then finding the 110% minimum sales price this gives us 61.06 Isk per round. That would be the minimum I would put some Tremor S made from invention on the market.

So time to check the market and find out if we are in the ball park. Well there are 2 batches available in all of Metropolis atm. there is close to 500k rounds available at 49.97 isk per round and a further 1.3mil rounds available at 99.99 isk per round. So I can't compete with the 49.97 isk price but I could compete with the 99.99 isk price.

That should give you guys a feel for how to cost and value T2 Tremor S ammo. Some things to bring out of this. For ammo Invention costs are a significant portion of the final cost of the finished goods. Datacore prices will have significant swing impact on this portion of the final cost. For the manufacturing cost itself note that a ME-4 will use 50% more materials compared to a fully researched BPO so a BPO owner will have a SEVERE profit advantage when compared to an inventor In the above example his cost would be hovering arround 20.5 isk per round. But again there are only so many BPOs out there and they were always insufficient to meet demand. So when the cheap stuff hits the market it tends to sell out quite quickly. It's interesting to note that in this case The two advanced materials and the morphite represent the lions share of the material costs.

So the 5 elements that affect invented Tremor S ammo costs at the moment are in order: Rocket Science Datacores, Fullerides, Nuclear Physics Datacores, Fernite Carbide and Morphite.

Note that the cost to invent Tremor M and Tremor L will remain the same. But the material/manufacturing costs will go up significantly. So those rounds will be tied more closely to the advanced materials. Also I spoted a single Tremor S BPC on the market for 2.3million or so. With the average cost of invention hovering arround 1.233mil per BPC this represents a decent profit but not outrageous sales price. I did a quick calculation (thru a purchased bpc in the above spredsheet and found out that had I purchased that BPC to manufacture the ammo the minimum sales price jumps up to 85 isk per round. Still competitive against the 99.99 isk price point but definitly not against the 49.97 price point. I should note that looking at the price history graph 50 isk per unit seems to be the historical value going way back when. In the last month the daily volume seems to have picked up from it's historical values and is now 20-30k per day. This is consistent with an upsurge in popularity of the T2 frigates with the advent of the speed changes.

Jumping to Heimatar - omg the situation is different. The daily average moved seems to be hovering around 50k units. However the price has been shoved way way up. A month ago it stabilized around 100 isk a unit (which matches the 99.9 price point in Metropolis) and within the last week all price points are around 250 is per unit (hell even my "initial oops" ammo is profitable at those prices. There not being any significant materials movement to account for this I can only speculate that this is entirely due to speculators or a market manipulation attempt trying to take advantage of nearby FW operations.

And that concludes the lesson for today.

Late edit: made a materials mistake - now corrected.


Kirith Kodachi said...

Excellent work. I definitely recommend getting the RAM BPO as you can shave a good amount off their price by building them yourself.

Also, you might find markets with lower volume but higher prices in non-Minmatar space, selling to Minmatar expatriots.

Letrange said...

Even better I've got researched RAM BPOs.

Leumas said...

Excellent instruction. Much appreciated.

Anonymous said...

Would you be willing to share your spreadsheets? I'm developing my own and would love to see another perspective.

Letrange said...

Actually I wouldn't mind if you don't mind the fact that like all working spreadsheets, it's meant for my own use, not universal usage. I haven't gotten all the refinements I would like in it yet (like incorporating a skills page and the proper equations to figure things out from original stats and what not).