Verynice explanation. Agree with the maths.

Did a couple tests after a 100 mile drive. Headlights, AC, radio on.

Blower on low:
13.37 @ cig, 13.70 @ battery

Blower on high:
12.90 @ cig, 13.36 @ battery

Will do no loads at all next...

I would call 13.36 volts at the battery under load acceptable. You're not discharging the battery at that voltage (although you're not charging it much, either.)

What you're seeing at the cigarette lighter is basically the combined voltage drop of all the wire and electrical connections between the battery and the fuse panel. Losing half a volt under heavy load is actually not too bad, but you might be able to do better by cleaning and tightening the various connections involved. I get a full volt of drop in my old VW Cabriolet under similar conditions. It was bad enough on that car that I rewired the headlight circuit with some relays and a direct wire to the alternator, so my headlights wouldn't dim when I turned on the blower and the rear defogger.

Keep in mind copper is expensive, so car manufacturers tend to trade off some voltage drop in order to use smaller wire...

Agreed. However in some cases I've seen down into the mid-12's. Knowing the exact drop is key, because if I'm below 12.72 at the battery, I am discharging slowly/slightly.

I've also seen as high as 13.9v, which isn't bad...

After another 60 miles, idling with nothing on:

13.74 @ cig, 13.92 @ battery

The cigarette lighter would bounce between 13.68 and 13.78 constantly. At the battery it was constant because its capacitance acts like a filter.

But so I guess that is my actual voltage drop... 0.18V

It means that so long as I dont see lower than 12.54V at the lighter, I should be OK with not discharging the battery during operations.

Just took a measurement on my 81 240D which has it's original alternator... 14.31V solid. At the cig lighter...

That's an original MB alternator in a car that is an example of what a w123 really should be.