Hydra-headed production loops and profit maximisation

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twilight_echoes
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Hydra-headed production loops and profit maximisation

Post by twilight_echoes » Sat, 30. Apr 11, 06:20

Q. What is a Hydra-headed loop, and how does it maximise profits?

A hydra headed loop is a set of products which sit on top of an energy production loop, which would, in theory, consume more resources than the energy loop can supply.

That doesn't seem to make much sense, surely the best way to design a loop is to ensure that every factory has as much resource as it could possibly need.

In a manner of speaking, that's true, but it misses a critical point. The AI has unpredictable demands for products. When you build a fab, it may be busy all the time, or half the time, or full of product and not producing. Classically, this is seen as a failing factory, or a reason to adjust prices. In a hydra headed loop, that isn't exactly the case.

Alright, so are you saying that it doesn't matter if my factories are full, or that my prices are too high?

Up to a point it doesn't matter. On big ticket items, the variation in selling price is quite narrow. It matters more on small ticket items to sell for close to maximum price, and if you can't do that ***all the time*** it is better to add another factory because of the opportunity cost in e-cells being taken up.

An energy loop essentially creates surplus e-cells which are then cycled into the products you sell. The critical point of a hydra headed loop is to make sure all your surplus energy is used, all the time, to produce a product - any product which sells at a good price.

Of course, it's always best to build fabs you think will be very successful, but you can't always tell. Sometimes you might be building fabs to support your own needs and wanting to sell on any surplus. So it depends on what you want too.

That sort of makes sense, but how do I know when that is happening?

After you place your energy production loop, you simply slowly add fabs which produce the products you want to sell, and keep on doing so until things appear to balance.

Why slowly?

In practice, it is hard to tell how effectively a product sells except over time. If you place too many "heads of your hydra" at once, you risk draining your core energy loop and having to re-seed it with crystals.

That has happened to me a few times, even with a normal loop. Is there anything else which I can do to prevent that happening?

One of the best ways to safeguard your core loop is to choose your crystal fab and its food suppliers from a different race to any products you plan to sell. That way, the food for your crystal fab is quarantined from the hunger of your product fabs.

Another thing to remember is that when you add a new station to your complex which produces a big slow product - like 2GJ shields or PPCs, it can take a big bite out of your stock - particularly in smallish complexes. It's a good idea to let your product food supplies build up some before you add new factories.

How does that work in practice?

The best way to build a complex is to think of each product as a pyramid. Energy flows in to the first tier food source, like Chelt or Biogas, which then flows down to the secondary such as BoFu or Rastar. This then mixes with ore or silicon to form the final product.

A clever way to build low maintenance loops is to have one or two more first tier food factories than you have secondary ones.

I.e. 5 chelt aquariums Ls and 4 Rastar refineries.

Isn't that a waste?

Sort of. If you consider the price of an extra chelt aquarium a big deal. But what you are really doing is building a buffer-zone into your complex which makes it more resilient to fluctuations.

The chelt aquariums can only dispose of their products through the rastar refineries, so over time, the stock of chelt will build up until your chelt factories are running on full.

What then?

Well, you are the budding production magnate. When your tier 1 fabs are full, perhaps it's time to add another product! Provided your core energy production can support it of course. What's more, you won't need to worry about your loop grinding to a halt and flashing yellow, because you have a big buffer of chelt to support the new Rastar fab you are adding.

As long as you are producing slightly more tier 1 food than your tier 2 fabs need, this will remain true.

So what was the thing about maximising profits from all this. It just seems like we're building a lot of factories which only sell half what they make.

There's two ways to look at this. The AI demands a certain amount of product. To maximise profits, you must look to meet that demand in all the areas you operate.

The AI may only demand 0.7 of a Mosquito missile fabs production - in Kingdoms End. It may only demand 0.3 of a PPC fab in kingdoms end. What's more, when you build a mosquito fab in Kingdoms End, you don't know in advance if all the products will sell.

The amount of profit you can make - in a big picture sense - is making sure you meet the AIs demand and that all the surplus energy from your energy loop is being used to produce product - any product - that will sell.

Aren't you missing a couple of things? What about the price of factories?

Over time, the price of factories becomes less relevant, but of course, in the early stages of the game there is a huge opportunity cost to building loops, and there are far better returns to be made by cleverly placing single factories into the trade grid,

A hydra-headed loop is a natural evolution from a simple loop which produces one product, which isn't selling as well as you might like. Two products which sell half the time is the same as one which sells all the time, so it's a round about way of getting to the same place.

Are there any other advantages?

There are some MAJOR advantages in building Hydra-heads if they are producing products which you happen to use and need yourself! Like when you start boarding operations and want your own hammers and flails. Maybe some wasps. Some shields and weapons for the big-fish you net. What you need over time will probably change, and you might want to sell some surplus to the AI.

This is where a Hydra headed complex comes into its own. So long as something is being produced and sold, the surplus sales to the AI give a cash benefit to fabs which might otherwise stand idle.

The resilience (in having more tier 1 than tier 2 fabs) will also compensate for spikes in demand - like when you want to fit out that new destroyer and suddenly choose to empty out all the PPCs from your complex.

Your overproduction of tier 1 food means that your tier 2's are always full, as long as there's energy in the system. You only have one indicator on your fuel tank. The number of surplus crystals. It's the only thing that matters. If your net crystals is falling, then you are producing more end product that your hydra can support. If they are rising - then the opposite is true. This makes it very easy to manage, and more importantly expand. Because falling crystals is a sign of your success, you can simple add more e-loop fabs and.... keep making it bigger!

twilight_echoes
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Post by twilight_echoes » Sat, 30. Apr 11, 06:21

reserved

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Flozem
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Post by Flozem » Sat, 30. Apr 11, 07:48

Nice guide.

Don't forget you can temporarily shut down complexes, and there is no factor called depreciation. So once you break even, anything coming out of your complex is absolutely free.... so no quirks about changing a factory's output depending on your need.

I always build my bigger complexes to use op surplus ore / silicon and energy. Then again: I also make use of mobile mining. This has one great advantage: you can keep adding to your plex with only one limitation: the power of your cpu.

Hence I fail to see the need of adding foodplexes of another race to prevent draining your plex. You can keep adding food and crystal plants + solar plants afterall...


I only build real closed loops for weaponry I need on a daily basis... 25mj shields, and missiles come to mind. In the end you will always want to maximize profits. And the way to do that, is building open loop plexes. CLS1 /2 and CAG open up many more possibilities here... You can set up CLS to transfer end product to your TL docked at EQD / PHQ or parked in space. And you can set up CAG to profit from lower third party orders.

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Progress-M
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Post by Progress-M » Sat, 30. Apr 11, 11:36

Progress-M approves of this thread. You have studied economics IRL? :-)

jlehtone
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Post by jlehtone » Sat, 30. Apr 11, 11:53

"Hydra-headed" does not feel like the most descriptive word for the concept and I do have slightly different lines of thought. However, having said that I must still admit that the business idea does have merits and has been presented well. :thumb_up:


May the profitssss come to you. :teladi:

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TTD
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Post by TTD » Sat, 30. Apr 11, 20:18

I read this in the wee hours of the morning.
Slow reading helped me absorb info.
I think it has merits.

So if i understand it correctly,put together the base building blocks that would be used by any production facility.
Put them in all sectors that are likely to be used for production.
Then add the production elements to them,as and when needed.
Once the commodity is no longer required,just switch the relevant factories off and put something else in place.

This saves having purpose built complexes.
Brilliant idea pilot !

Mileron
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Post by Mileron » Sun, 1. May 11, 19:16

This is a wonderful writeup on something I've been curious about and have been trying to put into practice in my own game.

For example, since my Antigone complex only outputs (at the moment) 25MJ shields and ASats, I have a HUGE energy surplus - 500k pieces - at any given time, not to mention the other resources - I've been jotting down items that are needed in nearby sectors and trying to figure out if they'll impact my production line.

Sure, I could add an additional CAG or CLS or even just a basic Supply or "Buy Ware" trader, but I like that it's fully closed loop at the moment.

I didn't think of applying the "stop production" order on an as-needed basis though, more along the lines of "okay I'm done with that now and ignore this station" point of view.

I'll definitely refer back to your post as a starting point for further plex conversions :)

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Post by Master of the Blade » Sun, 1. May 11, 19:24

Something I've been thinking about for ages but never done because I absolutely hate building complexes. :roll: Nice to hear that it actually works, though. Good work. :)

And as for the extra tier 1 food, that's something everyone should always plan into their complexes IMO - it really makes keeping the things running smoothly far less of a pain, as you said in your post.
Allergic to work.

If at first you don't succeed, delegate the job to a minion.

Deleted User

Post by Deleted User » Mon, 2. May 11, 17:01

YES!!!!

I had stumbled across this idea while fragging Xenon late one night. Surely there is a way to lump factories into a complex that produces a multitude of profit making goods, making the complex more productive and easier to defend! Then I got fragged and went to bed... never thought of it again til now.

Excellently written and very detailed.

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