Re: Economic Model for Businesses

["Kris Ames" <kris@cioe.com>]

Some nice work here...
----------
From: Preston Wiley <quotha@laf.cioe.com>
To: gmlist@cioe.com
Subject: Economic Model for Businesses
Date: Wednesday, September 30, 1998 11:21 AM


Economics for AQ businesses
----------------------------

Using this method, one person should be choosen as the Business
Cooridinator.
This person will be responsible for keeping track of the Player
Businesses and
non-player business and informing the Players how much profits they have 
earned.

Let:

	C = Selling Price of Product
		(Determined by the AQ Player)
	D = Demand of Product
		(Equation Below)
	P = Production Cost of Product
		(Cost of Materials to Produce Product)
	S = Supply of Product
		(Determine by AQ Player up to Maximum)
	A = Advertisment Cost Per Month
		(Determined by AQ Player)

[Kris]--------------------------------------------------------------------
------------------------------
Shouldn't there be a formula to determine effectiveness of Advertisement
and in regards to effecting Demand.  I think most advertisement is
considered successful if it causes 5% of the audience to buy.  Will also
need to figure out some base costs for different types of advertisement
and rough percentages of population exposed.  Such as tavern bulletins
cost = 50 silver per tavern (cost of paper plus cost paid to tavern
owner) and population exposed per tavern maybe 0.01 % (it is only one
tavern and the literacy rate is low).  I mean throwing money at something
does not necessarily work.

Alternatively GM moderator in charge of business could just set this
effectiveness after listening to the Player roll play it and throw money
at it.
--------------------------------------------------------------------------
----------------------------------
	W = Cost of Workers per Month
		(Equation Below)
	M = Machine & Tool Maintence Monthly Cost
		(Total Machine Cost / 20)
	R = Cost of Monthly Rental of Items (Buildings, etc.)

Profits = CD - SP - A - W - M - R

Demand
------

Let:
	A = Ad Variable
		(Starts at .005, add .0025 per 125sp spent on ads per month)
		(Always add .0025 * Q per month)

[Kris]--------------------------------------------------------------------
--

I'd make this variable name Ad to avoid confusion.  Same with any other
variables that are the same letter.
--------------------------------------------------------------------------
-------
	C = Competition Variable
		(1 + 1 per local competitor + .5 per nonlocal competitor)
	F = Equilibrium Price
		(Price in book or GM Picks it) NOT KNOWN BY PLAYER
	I = Demand Population
		(People who might want to buy this product)
	P = Product Type
		(.75[Necessity] - .25[Luxary])
	Q = Quality of Product
		(0 is normal, < 0 low quality, > 0 high quality)

[Kris]--------------------------------------------------------------------
----

Shouldn't skill level of worker and material quality effect this stat?

--------------------------------------------------------------------------
---
	S = Supply of Product
		(As described above)

Demand = AIPF
	 ----
	  CS

Cost of Workers
---------------

Let:
	S = Skill Rank of Skill Required to Produce Product
		(Minimum of 7 to be useful)
	B = Base cost of Skill used for S
		(Not the 3 times version, the BASE cost)

Cost = S * (B/10) * 4    per worker per month

If you're production requires only non-skilled workers, the cost is
60 SP per worker per month.

Max Supply
----------

Let:
	V = Item Variable
		(Amount Produced by 20 workers in 1 month)
	W = Number of Workers
		(Determined by AQ Player)
	T = Tech Level
		(Normally 1, low quality machines decreases...)
	
[Kris]-------------------------------------------------------------------

On T you mean tech level of production equipment...What about changing to
tech level of production equipment in relation to tech level of product.

--------------------------------------------------------------------------
--
Max Supply =  TVW
	     -----
	       20