Warehouse

[jondonnis]

I understand the idea of a warehouse and it's good to see it in the game. But how do I best use it? Just starting my game and making a small profit of me supermarket. Grown my own wheat which sells for 61c, goes to the factory at 61c + 2c for shipping (right next door to the farm). I ship some wheat to the warehouse which is further away due to shipping it shows cost + freight to be 66c, the new price from the warehouse is now 98c.

If I link to the warehouse it's more expensive that just going from farm directly to the factory.

Reading the main site, I can see it would be useful for stuff like oil, storing it in the hope it goes high or when their are less oil fields.

[WilliamMGary]

1. In Capitalism II I had a huge company that I had to open a factory to buy chemical materials and then sell chemical material from there to my factories that way every time I had to shutdown a mine, all I had to do was hook up the new mine to it and all my factories would get the new chemical material with no major impact to the supply chain (re-link each individual factory to the new chemical mine). I also noticed this helped me use all my natural resources.

2. In Capitalism II I wanted to enter the sweater market the AI was already there the only way I could gain ahead was to sell my sweaters when they ran out of stock so I opened a factory to store Wool in and should it to my sweater factory so that I had a good supply of wood during the off season when the AI didn't.

3. In Capitalism Lab I have factories set up to supply my retail stores. It helps you manage the supply chain so much better. I'm still trying to figure out the correct balance but the main benefit is when your product quality goes from 30 to 60 you need to get rid of all your supply of 30 and then have the stores receive the products that of higher quality at once. (first in, first out).

4. In Capitalism Lab I opened a warehouse to charge more for a natural resource to the AI companies then I charged to my own. Worked well....until another AI started selling.

5. If you want to wholesale a product to the AI you could open a warehouse and charge more (to cover marketing for example) to your retail channel then you do your own stores.

[azxcvbnm321]

A warehouse is most useful if you have several suppliers of raw materials and several factories that use that raw material. For example I have 3 farms producing leather and 6-9 factories that use leather. If you try and link factories to a particular supplier, you may get a shortage or have a supplier that is not selling all that it could because supply and demand don't match up precisely. You also might get differences in quality as once farm is older and therefore produces better leather than another. With the warehouse, all the leather is pooled there and factories can draw inventory from that warehouse.

My complaint with the warehouse is that the sales units are still too small and I need around one per two factories. Since I must use a purchasing unit per supplier and space is limited (9 squares), that really hampers the effectiveness of my warehouses.

[WilliamMGary]

My complaint with the warehouse is that the sales units are still too small and I need around one per two factories. Since I must use a purchasing unit per supplier and space is limited (9 squares), that really hampers the effectiveness of my warehouses.

Even after getting the units to 9 with training?

If that's the case try to add more storage units and have the sales unit be feed from that.

I tend to do input Unit (in the middle) -> Storage Unit (to the left or right) -> Sales Unit (bottom center)

[jondonnis]

Helpful tips, thanks.

[azxcvbnm321]

No it becomes OK with training, but getting your staff up to level 9 takes a long time and a lot of money. Even up to level 5 takes some time and level 5 is where the sales staff can keep up in my game.

I have one inventory unit in the middle to feed my sales units. I can't remove sales units because they are where the bottleneck occurs. I also can't remove purchasing units because you need a separate purchasing unit for every supplier. Therefore the only unit I tend to remove are inventory units until there is only one left. The limited space available (9 squares) hampers the effectiveness of the warehouse greatly and reduces its usefulness.

[williet4038]

I love warehouses and use them extensively in the game. When warehouses were first introduced, it was suggested that they would help with the bottlenecks created by seasonal products and raw materials for manufacturing, which they do. However, I warehouse all the components, products, and semi-products I use for manufacturing as well as all the products I sell in my stores. While warehouses do increase costs and cut retail profits, they more than make up for it as respects the smoothness of the supply chain. I hate having factories or stores waiting for supplies. Warehouses usually eliminate the wait for the factories altogether and significantly reduce it for the stores.

Warehouses work well for me because of the way I like to play. I like to play with large cities so I wrote some scripts featuring 4 of the world's largest cities. The combined game population of the 4 cities is right around 15 million. I can't imagine trying to manufacture and sell product on this scale without warehouses, especially since I like to play relatively long games and usually only sell products that my company manufactures. I have been playing my current game for about 35 years and I have 151 stores, 21 farms, and 24 factories which I service with 43 warehouses and I am able to supply the stores pretty smoothly.

I normally start the game off by building farms and raising and selling livestock on a per city basis. I provide maximum training on all my farms and in all the factories. I also like to R&D and manufacture products on a product class basis and sell them in chains of specialty stores. I find that I have to build farms in each city because the retail margins tend to be tight and the warehouses make it impractical to import livestock. By using warehouses I can build medium farms with 5 livestock raising units, 3 processing units and only 1 sales unit. That's because I only have 1 warehouse input unit to supply for the entire city as opposed to each store. The upside of this configuration is that I can adequately supply livestock for a city of 5 million with a medium-size farm when the workers are fully trained. The downside is it can easily take me up to 2 years to make the supermarkets profitable. However, while the supermarkets may not be profitable, the farms and warehouses are profitable almost from the outset and my company is usually profitable within the first few months. It usually takes me 7 to 10 years and $100 in loans to build out the supermarket chain in all 4 cities, but by the time I am done, I am making between $70 and $100 million in profit (depending on the inflation settings) and am ready to start manufacturing my first highly researched high quality product which I sell at a premium price.

Warehouses are ideal if you like to build retail chains as I do. In a typical game, I will initially R&D all the products in a product class for 5 years and continuously thereafter in 2 or 3 year intervals. After the initial R&D, I usually set up one large factory for each product in the least expensive city then build warehouses in and export the product to each city employing a basic distribution center model. My typical warehouse configuration for a factory to store situation is an input unit connected to a storage unit connected to an output unit, thus requiring 2 (1 1/3) warehouses for a 4 product class. When all the units are full, I build the entire chain of stores and provision them from the local warehouse. I set up an advertising unit (Range) in the store with the highest customer traffic and control pricing for all the stores from that main store. In the case of small footprint stores like apparel or leather goods stores, the citywide chain can contain as many as 8 stores. If you multiply that by 4 cities, you can see that having all those stores requisitioning product directly from a single factory could be a nightmare and before warehouses were introduced, created all kinds of bottlenecks. Using warehouses, I have only 4 input units (1 in each city) requisitioning product from each factory which usually has 2 sales units. My warehouse configurations differ for raw material storage but are also aligned to the number of sources of material and the number of users.

As others have observed, warehouses raise prices and at the retail level, they can make product pricing more time-consuming. I find that with the livestock products, it's difficult get the supermarket prices up to a profitable level until after the first quality upgrade but with most other products, pricing is much less of a problem. Since I generally only sell better quality products that are produced by my fully vertically integrated enterprise, I make profits throughout the entire production process so I look at profitability on a firm-wide or profit center basis. I check the firm profits on the Firms tab on the Corporate Details pane 2 or 3 times per year. I have noticed that while I may only make between 5 to 8% in the retail stores, I make between 15 and 25% profit at the warehouses. Admittedly, this profit comes at the expense of the retail units, but given how much more smoothly my company runs, I am thoroughly okay with moving those profits to the warehouses and away from the stores. I also think that total sales are increased by the warehouses because the bottleneck reductions result in significant increases in product throughput. That's speculation, but I am not about to play a game without warehouses to test it.

[counting]

So has anyone tried to use advertising unit at the warehouse?

In theory, since product price is low at the warehouse hence it will have much higher product rating. Will it make warehouse advertising unit much effective than store advertising unit?

This could be a way to beat AIs for price as wholesalers to cities where you don't have brand recognition yet.

[WilliamMGary]

So has anyone tried to use advertising unit at the warehouse?

In theory, since product price is low at the warehouse hence it will have much higher product rating. Will it make warehouse advertising unit much effective than store advertising unit?

This could be a way to beat AIs for price as wholesalers to cities where you don't have brand recognition yet.

All my advertising in the warehouse not sure how to measure the effectiveness but it does give me a clearer picture of my retail profitability, with warehouses "wholesaling" they do a large volume which in theory should be able to cover advertising expenses. I've handed over advertising control to my CMO which has resulted in the warehouses also reporting nice profits more consistently

[williet4038]

Perhaps the simplest way to "test" whether advertising in the warehouse (brand rating) gets passed on is to look at the brand rating of a product when it is first introduced into a new store. If it starts out with the same brand rating that it had in the advertising warehouse, then the brand rating must be getting passed on and since it normally does not get immediately passed on from the warehouse, a positive result would be the result of advertising. All processing, warehousing and retailing structures will see an increase in the brand ratings over time with throughput (volume) appearing to be the deciding factor. Advertising speeds the process up, but the manual also indicates that the brand rating will be increased as a result of "word of mouth" which appears to correlate to throughput.

If you use a single centralized warehouse to distribute a product to all cities, I can see how advertising in that warehouse might be advantageous both from a brand rating and expense standpoint. If you decentralize your warehouses into each city, I don't see the advantage of using the warehouse versus the store for advertising. After all, the store has an empty unit while in the warehouse, you have to trade off a warehouse function for an administrative function. I use a decentralized warehouse configuration with the Range Brand setting and I advertise in one store per city per product class. The products in all the stores receive the same brand rating as those in the advertising store and it seems that the brand rating in the advertising store is impacted by the combined product volume (throughput) of the entire city. That is an advantage that advertising in the warehouse should also provide. And by the way, the test I mentioned above, I know to be true for opening a new store in the configuration I use and I believe commercial goods bought from seaports also enter the store with the same brand rating of those in the seaport.

As for the cost of advertising, you could just as easily argue that advertising is a retail function as it is being done to sell the product at retail, hence it really is a retail expense and should be accounted for as such. I find it very difficult to make money in a supermarket that is advertising, but in virtually every other form of retail, I can make money in the advertising store even after the cost of advertising. I do use the store with the highest customer traffic (volume) for advertising to make sure I am bringing in enough cash to pay for it. Over time, my retail profits tend to run between 5 and 9% and the warehouse profits between 15 and 25% depending on inflation settings. The proportional impact of expensing advertising costs in the warehouses would be considerably lower than in the stores, so I could see how that could be viewed as an advantage. If I change my organizational scheme sometime, that is certainly a concept worth trying.