Economic of scales in production :: Questions and answers. Help.

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Topic created : 19.04.2017, 05:15

talos1279

I'm just a newbie here and I wanted to start in production section.

I uses the uncle package in the beginning and the factory did quite well at the beginning. However, as I tried to scale down my business to only sell products that my factory produces, things stroke me hard.

The factory produced both dress and shirts. They do not have high quality as the store competitor so I tried for a low quality, low price strategy in the store. However, the sales volume did not get to make a balance (300 produced but only 60 sold, I guess that it's due to the store being in residential area and my reputation for store is not much). I tried to balance out by reducing the amount of workers in factory (cost a lot of money to send them off) as their salary comprised of 70% of prime cost. In the next week, the amount of product was same as amount sold in store but their prime cost rose so much (from 20.5$ to 100$) that the expenses was the same before firing people off.

I figured out that this was due to economic of scales here. I want to ask you guys which production section that is not seriously impacted by the economic of scale (prime cost does not increase so drastically when you have few worker). My guess is agriculture but I am not so sure since I do not know anything about business.

Another side question is how I should sell my products. Should I sell them directly from factory or give them to store)? I am worried that selling directly from factory will only sell to players, not the local thus not getting any sales.

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19.04.2017, 06:29

xcrusader010

Bogan Corporation

G'day

I wouldn't recommend scaling down your stores to company products. The market has plenty of items on offer -- cheap Well

Go to Macroeconomics, click on the countries listed, all regions, and look at the wealth levels. If the city has 30+ wealth, then go to Market Analysis, and look for high price items (Such as red caviar) that have a high local store price. It was recommended to me to spend all my cash on pu erh and caviar, and I was surprised to see I was raking in billions - you just have to pay attention to the market.

Tip: Only use a maximum of two store departments, I only use one department to increase sales volume

Don't use low quality items at low prices -- use high quality items for inflated prices, in no-competition cities with 30+ wealth.

I did the same as you before -- I had a lot of clothes factories, but that was unprofitable. Just buy the stuff off the market, that way you don't hurt your qualification growths. You can reserve factories for better items, like car parts or other high price items.

If you open a car repair station in a city with no competition, you'd make a killing. ;)

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Bogan Corporation

19.04.2017, 08:48

talos1279

How can I stop the factory then? Its current technology level is too expensive for me to repurchase. I don't want to sell it since I may have use for it later.

19.04.2017, 10:07

xcrusader010

Bogan Corporation

You could send all workers to vacation, you will still have to pay half the avg city salary though.

You don't have to close it yet, keep it going, if you want inflate the prices and I can buy them off you for your profit. It's good to install Xio Script to keep your qualifications rising properly. But, what you shouldn't do is limit your store to only what you produce. Choose one department, and make sure the store is in low competition area (Market analysis). Also check out the qualification growth link

Also, use the search function of this forum, or even search on Google. There are a million things to learn, one could write a book about it and not cover every little trick ;)

I've pm'd you too

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Bogan Corporation

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