Re:How to avoid Amazon: guide to online shopping
by SkyPuncher on Monday April 27, 2020 @10:34PM
(#23002733)
I win a contract to deliver mail to the moon. $5B per delivery. 1 per week. My costs are $25B + $1B per delivery (we're making this up). 6 weeks, I'm making 80% margin per delivery.
Suddenly a bunch of people want to live on the moon. Rebid, win contract that says I now have 10 deliveries per day. I don't have enough rockets to support 10 deliveries per day, so I need to build a lot.
I also need to do it extremely quickly. Instead of $5B per rocket, I need to pay $10B (expedite, overtime, shortages, etc) in order to meet my contract's deadlines. My capacity also means, I can no longer rely on existing launch sites, $100B to build my own launch site plus an additional $1B per launch.
As long as I can keep my position on this contract, I'll make mega bucks in the long run, but short term I'm hemorrhaging cash.
Suddenly a bunch of people want to live on the moon. Rebid, win contract that says I now have 10 deliveries per day. I don't have enough rockets to support 10 deliveries per day, so I need to build a lot.
I also need to do it extremely quickly. Instead of $5B per rocket, I need to pay $10B (expedite, overtime, shortages, etc) in order to meet my contract's deadlines. My capacity also means, I can no longer rely on existing launch sites, $100B to build my own launch site plus an additional $1B per launch.
As long as I can keep my position on this contract, I'll make mega bucks in the long run, but short term I'm hemorrhaging cash.