Also worth noting is that there might be a lower cap on troop production than goods. Once you have max level barracks and needles, how does that compare to a similar city using the same space for goods?
When I ran the numbers for a single province in chapter 7 the supplies costs to produce negotiating goods and replacement troops for those lost in combat were equal. The difference was in the the production time to replace the usage. The per encounter numbers were: negotiating required 4.5 factory hours (1/2 of a 3 hour run in each tier) and combat required 1 barracks hour (L4 Needles and L19 barracks). If a person can't consistently do 3 hour runs on the factories and instead does 9/9/3 per day then it would work out to 10 encounters they can negotiate per day for each set of factories they have. Whereas keeping the barracks running has less time constraints and if able to run constantly would produce enough to handle 24 encounters per day.
I will drop the barracks production down to 20 encounters per day to cover heavier losses, missed time, and ease of comparison. I will also leave out all the culture and population buildings and roads during the space comparison. I would need 2 sets of factories to match the barracks production: T1 3x5=15, T2 4x4=16, T3 4x5=20; 51x2 (match production rates)=102 + Mountain Halls 3x8 = 126. Barracks 4x7=28, 5 Armories 5x5x5=125, Needles 3x5=15, Martial Monastery 4x5=20; total of 188. Space wise negotiating currently wins. I don't know how many orcs are needed as an per encounter later, but once they are required then the armories get counted on both sides possibly with scaling factors to even the production over time.
Now I will get the culture and population for those. Totals required for 1 set of the factories: 5858 population and 1495 culture; double that to match the replenishment rates and you got 11716 pop and 2990 culture. On the military side I don't feel adding all the values for the barracks from the wiki so I used the armory's pop/culture ratio and applied that to the ranking points to estimate the barracks: 6521 population and 14949 culture. If I then subtract out the culture from the MM: 12078 culture. Factory production when matched for time uses much more population.
Those numbers are based on province negotiation. The tournament is a bit different and someone would have to really track all the details for a few tournaments, but I will pop out just a few things that I have handy to look at right now. Catering province 10 round 2 averages a full 3 hour production from each tier per encounter and province 11 round 1 was nearly the same; that is double what I found for province negotiations which would mean adding another 102 squares of factories (total 204+24) and another 11716 population to exclusively cater in tournaments. Some early provinces are much lower but I haven't tried to full record all of it to calculate and a quick look at province 7 round 3 showed catering still using about 3/4ths of a 3 hour production from all tiers. On the military side province 10 round 2 had a tourney SS of 390 and province 11 round 1 had 430. Both of those should have average about 1 tourney squad for combat losses. My regular SS is 780 making the tourney losses at that point about 1/2 squad per encounter. That is the number I used in my province calculations because I aim to keep those at easy to low medium. Which means that for tournaments combat likely uses less space to produce the materials to finish equal numbers of encounters in an equal amount of time.
Equalizing for time is really the key to making a fair comparison of the 2 methods.
Personally I'm doing OK with a hybrid where I've skipped most SS techs and can do both fairly well. Jack of all trades master of none sorta thing.
I use the same strategy. I started skipping them in chapter 7 when the advanced scouts tech turned everything on the current ring to easy. If that doesn't happen at the start of a later chapter then I will grab one of the older optional techs to bring them to easy for the start of the chapter. I delay most of the conquering until the end of the chapter when I have all the mandatory SS techs.