Can you rationally forecast your profits and ROI?

[NotACapitalist]

I'm pretty new, but my impression so far is that you don't have enough information to make even a back-of-the-envelope guess about how profitable it might be to build a factory, or a store, or a whole supply chain. Maybe you don't even have a good way to guess whether your new enterprise will run at a profit at a loss!

That's fine if you have lots of cash on hand, or if investors are willing to throw money at you. But if you want to play where you are bootstrapping from low starting capital, it's a potentially big deal.

The best strategy seems to be to look at how your existing buildings and supply chains are performing. Then, compared to those, you use your fuzzy qualitative intuition to imagine/fudge how differently your new investment would perform, given that it will have many differences in market size, in quality, in product line, in location, and so on. It has a lot of "hope and pray" to it.

But you don't really have the sort of numbers that you could put into an Excel sheet and try to estimate anything concrete.

I guess you could argue that all this uncertainty makes the game *more* like real life rather than *less*. But in real life you'd have more concrete information, if you wanted to present a business plan to someone, for example.

[cestari]

THIS IS A RELEVANT QUESTION!

I'm waiting for this asnwer too. I guess you're right:

"The best strategy seems to be to look at how your existing buildings and supply chains are performing. Then, compared to those, you use your fuzzy qualitative intuition to imagine/fudge how differently your new investment would perform, given that it will have many differences in market size, in quality, in product line, in location, and so on. It has a lot of "hope and pray" to it."


Business are imperfect information games. You can only maximazes your chances of success and hope that works. I guess this what Capitslism Lab teaches about real life business and yes maybe the best way to evaluate is looking to the current stat. Would be fun to see a experiment with Deep Learning and what strategy and data the machine would choose to play optimally.

P.S : Learning english, sorry for any mistakes

[chengtsai]

Easy answer to your question, please fast forward your game 1 year without saving it, see the result and reload the game afterwards.

[SchrodingerGargoyle]

You can check the total market size of a product in the 'Products' tab. The profitability of the various products in the game is very similar to the profitability of the various products in the real world. So highly profitable products (from an operating profitability point of view) in real life like internet services, software products, semiconductors, drugs and consumer electronics will also be very profitable in the game. Commodities are also fairly lucrative but the market size in the vanilla version of the game is often not sufficiently large. Furthermore, consumer products have a more or less predetermined market size at the start of the game. The market size for a consumer product can change if you have inflation enabled, or a company has a monopoly and raises prices, or newer products get invented or if the GPD per Capita increases (this is roughly expressed in the game as the Real Wage Rate) but it's still more or less constant. On the other hand the market for industrial goods changes during the game e.g. if all the computers sold are imported through seaports there will be no market for CPUs since there is no need for them. The moral of the story is that profitability (both in absolute and percentage terms) is closely related to the total market size of a product so just check the 'Products' tab! Having said that all the product categories (expect for food products) are very profitable if you are able to create (and maintain) a monopoly...

[mrgarrettscott]

I'm pretty new, but my impression so far is that you don't have enough information to make even a back-of-the-envelope guess about how profitable it might be to build a factory, or a store, or a whole supply chain. Maybe you don't even have a good way to guess whether your new enterprise will run at a profit at a loss!

I agree with this. The first time I played Capitalism 2, I learned to play on based on the information of others who had already played. I didn't know what would be profitable. Should I farm or get products from the seaport? Because it is a game, there are definitely some winning approaches.

But you don't really have the sort of numbers that you could put into an Excel sheet and try to estimate anything concrete.

Fortunately, we don't have to do this. Who would actually want to do this for a computer game? Not me, but I assume there might be some hardcore cats out there that might want to extrapolate the data on the potential of mining gold to manufacture gold rings and sell in jewelry stores in a city with a small population a low wage rate.

[bdubbs]

Can you make a spreadsheet or otherwise look at the game and analyze "Okay so If I build this retail shop I'll be able to sell x units of y product at z price and I will have this cost so my profit or loss will be blank"...not that I've ever been aware of.

What you can do is look through your seaport products and see the price you'll be buying at, estimate if freight is significant based on product / location, and look at the product details screen for the city you want to sell in to see what the price, quality, and brand expectations are in the local market and make a rough determination of whether or not you could sell that product for profit or not.

With manufacturing your own products its much more difficult especially if the product has many inputs. For example if you want to make something simple like leather wallets the true cost will be what it cost to run the farm, the factory, and the retailer plus freight. Then its a matter of how many units of the wallets can you sell at a given price based on the same kind of guessing game of the quality of your own wallets versus the local competition.

If you were really determined you could figure out how much initial cash layout it would take you to sell the leather wallets, and the monthly cost of the farm + factory + retailer before you've built anything. Freight is going to be harder to estimate but for this product specifically you know its minimal on the side of the finished product (wallets) but you want to keep the leather farm near the factory.

Ball parking how many wallets you could produce at your factory in a month would be a mystery to me, and even with knowing the quality of the finished wallets it can be difficult to ballpark where you'll have to price them to compete in a local market.

So you can get closer to being able to math out profitability ahead of time than you'd initially think and there are ways to use the information thats on hand to have rough estimates.

IMO whats more important than the profitability of a certain product is the total demand for it. If the market for leather jackets is 10x that of leather wallets you're probably going to be able to make more money selling the leather jackets long term.