Steam Community :: Guide :: Don't fill up your Nightclub! - Opportunity Cost vs Fixed Cost Degression

Store Page

Grand Theft Auto V Legacy

All Discussions Screenshots Artwork Broadcasts Videos News Guides Reviews

Grand Theft Auto V Legacy > Guides > Red Z's Guides

81 ratings

Don't fill up your Nightclub! - Opportunity Cost vs Fixed Cost Degression

By Red Z

This guide aims to give an answer to the question "When should I sell my Nightclub Goods?" in order to maximise profits per hour. The answer is not as trivial as it seems.
WARNING: Math and accounting ahead!

Award

Created by

Red Z
Offline

Category: Characters, Gameplay Basics, Multiplayer

Languages: English

Posted

9 Apr, 2019 @ 8:35am

4,201	Unique Visitors
87	Current Favorites

Guide Index

Overview

Introduction to the Problem

Time and Revenue

Identifying the Key Points to sell via Gantt Chart

Analysing the Key Points

Conclusion

Comments

Introduction to the Problem

The Nightclub has a total of 7 different types of goods that you are able to produce but you can only assign 5 technicians.
Additionally, once your revenue goes above $1,000,000, Tony's cut will stop being 10% of the revenue but instead be fixed at $100,000. So every additional good you produce above that point will activate the effect known as Fixed Cost Degression. The fixed cost of $100,000 will split up over more goods, generating more revenue the more goods you sell.

However, if you assign a technician to one of the other 2 types of goods, you start experiencing a different effect - Opportunity Cost. Once you're producing a good that is not the most profitable you're effectively spending time on something that is "not as worth it", because it is less than optimal. You gain less profit per hour.

So the question is: Should you sell once your 5 goods are full? Should you use the cap of Tony's Cut or are the Opportunity Costs too high?

Time and Revenue

Table 1 below shows the time it takes for each good to be produced to the maximum.
The original source is this Reddit thread: https://www.reddit.com/r/gtaonline/comments/91tyvu/nightclub_earnings_table_and_guide/
The table has been expanded for use for this guide.

Note: My version of Excel is German, so . and , are interchanged.

Table 1: Time and Revenues

It's already common knowledge that you should do everything but Organic and Printing first but Table 1 gives you a good overview again. What immedeatly jumps into sight is the fact that three of the products finish after 20 hours, so when selecting the two other goods, at least one of the technicians will have no work!

What we need now is a Gantt Chart in order to find all possible points at which we could potentially stop the production and sell.

Identifying the Key Points to sell via Gantt Chart

Table 2 shows a Gantt Chart, the x-Axis resembles the time in hours that it takes to produce each product. We can identify a lot of time where a few of the technicians are doing absolutely nothing.
Unfortunetly, the numbers for the hours are pretty small but I will list them after we are done identifying the key points.

Table 2: Gantt Chart

In Table 3, we are now identifying all key points at which we could potentially sell for maximum profit.

Table 3: Relevant Points for sale

Now we need to analyse all of these possible selling points and we will get our answer!

Analysing the Key Points

The analysis is done by calculating the profits at each of these points and dividing it by the time it took to produce the goods in Table 5. Profit = Revenue - Cost.

Table 4 breaks down the revenue to each good.

Table 4: Break Down of the Revenue

Table 5: Calculating the Profit per hour

Conclusion

As shown in Table 5, you are making the most amount of money per hour when selling exactly after 20 hours and never touch Organic and Printing.
You will sell for $825,000 with Tony's Cut being $82,500, yielding you a profit of $742,500 which means $37,125 per hour.
You are not using the Fixed Cost Degression since the Opportunity Cost is higher than what you gain from that.

21 Comments

< >

Metallicat 30 Aug, 2020 @ 7:08pm

The 20 hour, only five goods system, is simple and clear and anyone can do it. It only has the tiny downside of not reducing Tony's cut. The upside is that you don't need to micromanage your technicians and sale times.

In fact, you can sell any time, and will get the same profit per hour. If you keep the crate size under 90, you'll always get the fast Speedo to deliver with too.

But there are some more tricks, which sometimes can come in handy.

At 20 hours, change to Organic and Printing, and sell Cash. This will be a small sale, but will let Cash resume production.

After selling the Cash at 20 hours, repeat for SA Imports and Pharma. Then, reset the technicians back to those.

Now, that means three sale trips every 20 hours, rather than one. But they'll be small sales, and those can run faster if you're lucky.

If you do this twice, then at 60 hours, you'll have a large stock of Cargo and Sporting Goods, and should be well above a million and get a better cut deal from Tony.

Harris 30 Dec, 2019 @ 7:47am

This is very well done, good job.

ulx 25 Dec, 2019 @ 4:40pm

thx for the mathematical proof of what i assumpted already xD
Anyway, since the larger Delivery Vehicles arent exactly great in handling and speed, i keep recommending ppl to sell around 500k stock already xD

Evil 23 Jun, 2019 @ 9:33am

I barely understand anything related to making money in gta and I'm hella confused.

RETEP 1 Jun, 2019 @ 6:23pm

i dont want to belive this guy has some experience in economy but still well done.

Trobby 21 Apr, 2019 @ 9:06am

Fill it up 100% anyways and sell in a populated lobby for that sweet sweet rival players bonus

𝕋𝕙𝕖𝔸𝕓𝕪𝕤𝕊 17 Apr, 2019 @ 8:17pm

Woodlin_Loner 17 Apr, 2019 @ 11:51am

Damn, didn't think this would be so in depth. You put a lot of effort into this.

Will show this to my friends, you are an amazing person and thanks for being in this community.

Basio1k 17 Apr, 2019 @ 8:46am

i was high reading this

i dont know what the fuck i just read i gave up 75% in

Stakes 16 Apr, 2019 @ 9:02am

Hi. I'm make animations for the steam profile to the order. Read more in my profile.

Привет. Я делаю анимации для профиля на заказ. Подробнее в моем профиле

< >