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What exactly are the administrative points meant to simulate?

Thanks

Staff competence.
Planning, analysis, logistics forecasts, leadership qualities.
Etc.
Does that help?

THe same stuff is also reflected in each commander's values, more concretely and clearly.  But the basic AP generation system reflects it as an aggregate, national level.

I think Admin Points are a pretty good abstraction of all the things that make it impossible to do everything at once: staff load, political considerations, inertia, inter- and intra-service squabbling, etc.

There are real-life reasons why you can't play musical chairs with your generals and other assignments. Whatever those reasons are, Admin Points model them.