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Grit Breather
BetaMax.
660
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Posted - 2012.07.31 13:32:00 -
[1] - Quote
I just posted this (long) explanation in the Requests forum but thougt the General forum could also benefit from it.
It was originally posted here.
Alright, I'll share a few tricks from the world of ERP (Enterprise Resource Management) systems with you.
(BTW, ERP is not some cool addition to EVE/Dust you can use to track stuff. It's a concept used in real world company management and usually cost upwards of a few $M to implement)
With ERP systems you sometimes implement a stock tracking module. What this does it keep track of your warehouse and the running costs of goods you own.
What's the running cost of goods you ask? Let me explain.
Consider this scenario (which is quite likely on the EVE/Dust market).
1. Day 1 - You bought 50 ARs for 500 ISK a piece.
2. Day 4 - You bought 33 ARs for 700 ISK a piece.
3. Day 5 - You bought 21 ARs for 400 ISK a piece.
Assuming you lost nothing, you now have a stock of 104 ARs. But how much did they actually cost?
Well that's easy. They cost the average price of all their purchases. That formula would look like this:
AvgCost = ((50*500) + (33*700) + (21*400)) / (50+33+21)
Calculating that gives us this:
AvgCost = 543.27 ISK
With your current stock you have 104 ARs costing 543.27 ISK each.
Now you went and lost 7 ARs in a match. Calculating that is rather simple too.
LostISK = 543.27 * 7
LostISK = 3802.89 ISK
So we now have only 97 ARs left in our stock but they are still worth 543.27 ISK each.
Now let's complicate it.
After losing those 7 ARs, you went and bought another 15 for 800 ISK (EVE player caused inflation...). How much is each of them valued at now?
AvgCost = ((97*543.27) + (15*800)) / (97+15)
AvgCost = 577.65 ISK
So after those two transactions (losing 7 ARs and then buying 15 new ones) the new average cost of your AR stock is 577.65 ISK. If you lose any more ARs, that will be the price per unit you'll be losing. Same goes for selling them. Selling at less than that would be a personal loss to you.
While I don't think this clears things up for most (math hell!), I hope it clears it up for the few who do understand what I'm rambling about. |
Grit Breather
BetaMax.
660
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Posted - 2012.07.31 13:39:00 -
[2] - Quote
EnglishSnake wrote:Or just manufacture them yourself and bingo no cost except time
No. Lots of costs. In fact, a lot more math management.
Manufacturing requires resources and raw materials.
In EVE, even the simplest piece of equipment (let's say a shuttle) needs at least 3-4 different minerals and maybe 1-2 items. Then you also need the BPC/BPO and have a book a manufacturing slot in a space station with a factory.
Not really the easiest of processes for a Dust merc to fathom. |
Grit Breather
BetaMax.
660
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Posted - 2012.07.31 13:43:00 -
[3] - Quote
EnglishSnake wrote:Its an AR it will require alot less and should be very easy to do
The militia ones will probably require Veldspar and maybe some targetting components. As you move up to the proto ones they'll require a mixture of more expensive (or just harder to find if you insist on mining) minerals. |
Grit Breather
BetaMax.
660
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Posted - 2012.07.31 13:44:00 -
[4] - Quote
PEEEEEEETREEEEEEEEEEEEEE wrote:MMMmmmm Inventory valuation using average costing.
I see I have a fellow accountant in the ranks.
Now value those AR's using the FIFO method!!!! GO!
Not an accountant I'm afraid. Sorry to disappoint. I'm in IT and mainly work with ERP and CRM systems. I do all the cool stuff without being bound to a chair all day.  |
Grit Breather
BetaMax.
660
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Posted - 2012.07.31 13:49:00 -
[5] - Quote
EnglishSnake wrote:Grit Breather wrote:EnglishSnake wrote:Its an AR it will require alot less and should be very easy to do The militia ones will probably require Veldspar and maybe some targetting components. As you move up to the proto ones they'll require a mixture of more expensive (or just harder to find if you insist on mining) minerals. Yea but its tht easy you can either mine the materials which doesnt take long or buy off market
Where are you going with the bucket Grit?
Oh! I'm going to mine enough Veldspar for my AR. I'll be back for lunch! |
Grit Breather
BetaMax.
660
|
Posted - 2012.07.31 13:54:00 -
[6] - Quote
PEEEEEEETREEEEEEEEEEEEEE wrote:MMMmmmm Inventory valuation using average costing.
I see I have a fellow accountant in the ranks.
Now value those AR's using the FIFO method!!!! GO!
I took you up on that and did a bit of research into FIFO as I didn't know it.
While it's a really cool method and fits well into my way of thinking (I like to control and monitor every possible variable), I believe it's not relevant to stock management in Dust. Would just give you a load of figures you couldn't really do much with.  |
Grit Breather
BetaMax.
660
|
Posted - 2012.07.31 14:05:00 -
[7] - Quote
PEEEEEEETREEEEEEEEEEEEEE wrote:Grit Breather wrote:PEEEEEEETREEEEEEEEEEEEEE wrote:MMMmmmm Inventory valuation using average costing.
I see I have a fellow accountant in the ranks.
Now value those AR's using the FIFO method!!!! GO! Not an accountant I'm afraid. Sorry to disappoint. I'm in IT and mainly work with ERP and CRM systems. I do all the cool stuff without being bound to a chair all day. *sitting in my chair right now* 
Chair bound people are cool too!
If it weren't for chair bound people we would have no math at all. Math is fun!
Also, we would have no devs and thus no Dust... |
Grit Breather
BetaMax.
660
|
Posted - 2012.07.31 16:48:00 -
[8] - Quote
Roccano1 wrote:Grit Breather wrote:EnglishSnake wrote:Or just manufacture them yourself and bingo no cost except time No. Lots of costs. In fact, a lot more math management. Manufacturing requires resources and raw materials. In EVE, even the simplest piece of equipment (let's say a shuttle) needs at least 3-4 different minerals and maybe 1-2 items. Then you also need the BPC/BPO and have a book a manufacturing slot in a space station with a factory. Not really the easiest of processes for a Dust merc to fathom. From what I remember, it only takes one type of mineral to make a shuttle, so you might want to go with a Frigate, or a destroyer for your example.
Alright. A frigate. |
Grit Breather
BetaMax.
660
|
Posted - 2012.07.31 20:10:00 -
[9] - Quote
TheAmazing FlyingPig wrote:But if I mine the minerals myself, they're free.
Until you start counting the costs of mining gear, transportation, storage etc'. And that's just for the mining. You mustn't forget production costs. |
Grit Breather
BetaMax.
660
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Posted - 2012.08.01 13:14:00 -
[10] - Quote
TheAmazing FlyingPig wrote:... I seriously hope you guys saw that I was trolling :v
Playing Eve a few years myself, the "minerals I mined are free" thing... yea... no...
Try adding some tones to your text next time. Or at least be around to answer fast enough. |
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Grit Breather
BetaMax.
660
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Posted - 2012.08.01 13:31:00 -
[11] - Quote
Tak Kak wrote:Or! or...I steal them. Cost issue solved.
Not really. You need a more expensive ship to gun down those miners fast enough for those friends of theirs to not show up in time. |
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