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aruchra
Bimasakti Incorporated
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Posted - 2011.01.14 04:54:00 -
[1]
OK here is the case, I build 10 item with past material price, now all materials is spiking to 30%, when my item come out, i still can sell at current market price with some profit, but the problem is, if i sell it at that price, i cant buy back the material need to build a new 10 item. but only can build 8 items.
In ISK i saw the profit, but cant build more 10 items. So in my case is that profit or not ?? If that happen what the best solution ??
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Kalrand
GoonWaffe Goonswarm Federation
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Posted - 2011.01.14 05:34:00 -
[2]
Originally by: aruchra
So in my case is that profit or not ??
That depends on how you determine a profit.
And that's not to be snarky, it really becomes an accounting question. I'd say you made a profit, yes, but that the market has moved enough that another production of the item would be unprofitable. I would sell this item, and produce a different one.
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mechtech
SRS Industries SRS.
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Posted - 2011.01.14 06:13:00 -
[3]
"the problem is, if i sell it at that price, i cant buy back the material need to build a new 10 item. but only can build 8 items."
It sounds like the end product is now undervalued when compared to the (recently spiked) materials. In this case you have made a 30% profit if you simply resell the materials. If the end product sells for less than the cost of production, simply resell the materials!
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Nefrums
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Posted - 2011.01.14 08:00:00 -
[4]
just wait for a few weeks for the item price to catch up to the mineral price.
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Vaerah Vahrokha
Minmatar Vahrokh Consulting
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Posted - 2011.01.14 08:56:00 -
[5]
Originally by: aruchra OK here is the case, I build 10 item with past material price, now all materials is spiking to 30%, when my item come out, i still can sell at current market price with some profit, but the problem is, if i sell it at that price, i cant buy back the material need to build a new 10 item. but only can build 8 items.
In ISK i saw the profit, but cant build more 10 items. So in my case is that profit or not ?? If that happen what the best solution ??
I'd consider it a loss, in the sense that maybe you can still recoup the potential loss and even come out at advantage, but you mismanaged something and arrived late.
Therefore, reset the situation, re-evaluate the factors that made you enter that market too late, try again with something more current. - Auditing & consulting
When looking for investors, please read http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
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Claire Voyant
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Posted - 2011.01.14 14:29:00 -
[6]
Edited by: Claire Voyant on 14/01/2011 14:29:49 Here's what you should do: 1. Reprocess your 10 items 2. Sell the materials 3. Buy 12 new items from the money you get 4. Reprocess, sell, and buy 14 items 5. Repeat until you can no longer make a profit 6. Go back into manufacturing the item.
Or perhaps you should just recheck your manufacturing skills.
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aruchra
Bimasakti Incorporated
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Posted - 2011.01.14 15:00:00 -
[7]
Thanks for all the answer, but item is not reprocessable :(
seem like solution to wait and patience is the only way, or buy all undervalue item and resell to higher price which volume is high compare to day history sales and more risk.
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Zeta Zhul
Caldari Preemptive Paranoia
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Posted - 2011.01.14 15:11:00 -
[8]
Basically this is the situation that gasoline stations are in. They buy a product @ 1.00/gal, sell @ 1.05/gal but then the wholesale price increases to 1.10/gal and now they're stuck having to borrow money to replace inventory.
And that's really the key.
If you're doing a production run as a one-off and you have no intention of making it a regular manufacturing cycle then there is effectively no need to replace inventory. So you can price for current sale without having to price in replacement materials.
If you're doing regular production cycles of the item then you cannot simply price for current sale but must instead price for replacement inventory costs.
Welcome to modern business.
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