gamemanual:pricing_metrics
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| gamemanual:pricing_metrics [2021/12/15 15:22] – admin | gamemanual:pricing_metrics [2022/02/15 18:00] (current) – external edit 127.0.0.1 | ||
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| + | === Video Tutorials === | ||
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| ====== Pricing Metrics ====== | ====== Pricing Metrics ====== | ||
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| For example, you’re building a new factory at the cost of $750,000 a month. Your branches cost $500,000 a month. Your labor costs another $620,000 per month, and you’re spending another $130,000 on marketing, racing, research, etc. In total, your non-manufacturing-related expenses are $2,000,000 per month. If you're building 5,000 total vehicles of all models per month, company costs per unit are $400. We add this number to the manufacturing costs, and that is your total unit costs. | For example, you’re building a new factory at the cost of $750,000 a month. Your branches cost $500,000 a month. Your labor costs another $620,000 per month, and you’re spending another $130,000 on marketing, racing, research, etc. In total, your non-manufacturing-related expenses are $2,000,000 per month. If you're building 5,000 total vehicles of all models per month, company costs per unit are $400. We add this number to the manufacturing costs, and that is your total unit costs. | ||
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| ====== How **Not** To Use These Metric ====== | ====== How **Not** To Use These Metric ====== | ||
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| A common pitfall many new CEO find themselves in is increasing the price of their vehicles based on the Manufacturing Costs or the Total Unit Costs. This action leads to a demand death spiral. As you increase prices, demand drops. Both the Manufacturing Costs and Total Unit Costs depend on the number of units produced. So if demand drops and you reduce production to match that, your Manufacturing and Total Unit Costs will go up. If you increase prices again to match the new values, the cycle will repeat until you are bankrupt. | A common pitfall many new CEO find themselves in is increasing the price of their vehicles based on the Manufacturing Costs or the Total Unit Costs. This action leads to a demand death spiral. As you increase prices, demand drops. Both the Manufacturing Costs and Total Unit Costs depend on the number of units produced. So if demand drops and you reduce production to match that, your Manufacturing and Total Unit Costs will go up. If you increase prices again to match the new values, the cycle will repeat until you are bankrupt. | ||
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| ====== How To Use These Metric ====== | ====== How To Use These Metric ====== | ||
gamemanual/pricing_metrics.1639599746.txt.gz · Last modified: 2022/02/15 17:58 (external edit)