Geographical Industrial Factors

What are the different factors when deciding where to put a factory or a store?

Site & Situation Both contribute to the industrial development of some countries while keeping others reliant on agricultural sectors Some locations may have great site & situation, others may have good site, but bad situation

Geographic Factors for Industry Site Internal Characteristics of a place based on its physical features New Orleans has poor site because it’s below sea level Situation Relationship that a location has with locations around it (Relative) Pittsburgh & Detroit have good situations-resources

Pittsburgh- Why Steel? IRON ORE COAL Rivers Ideal for production of steel: Iron Ore from Great Lakes regions (Minnesota, Wisconsin, Michigan), Coal in Western PA to fuel blast furnaces, Two major rivers provide access to ship steel all over the world. Rivers

Detroit: Why cars? What about Detroit’s Situation gave it an advantage for the auto industry?

Detroit & Pittsburgh established Basic Industries Basic Industry- focal point of the economy of a city Pittsburgh's basic industry? Detroit’s? Silicon Valley, CA? Minneapolis? Steel Automobiles Computer Chips Milling

Non-basic industry A secondary business that sprouts up after the city has been established Construction needed to build homes for the workers in the city’s basic industry

Multiplier Effect All three businesses together form the multiplier effect: The expansion of the economic base of a city as a result of the basic & non-basic industries located there Steel industry led to barge industry

Industrial Factors Industrial Costs Transportation Systems: Trucks Trains Airplanes Pipelines Ships

Industrial Costs Fixed Costs Do not fluctuate based on the quantity ordered Variable Costs Fluctuate based on the volume of the order

Transportation Systems The greater the distance traveled & the weight of the products, the greater cost to transport them Time-Space Compression- effort to increase the efficiency of time in the delivery process by diminishing distance obstacles Internet has sped up how fast industries can deliver products

5 Primary Forms of Industrial Transportation Trucks Highly mobile, delays from weather, traffic jams, use of fossil fuels, maintenance costs Trains Can haul A LOT very long distances, more fuel efficient, lack of route flexibility, only land travel Airplanes Super Fast, flexible routes, very expensive, low fuel efficiency, weather delays Pipelines Efficient way to move gas or liquid products, but only these things Ships Most energy efficient, slowest method, require access to waterways, weather dependent

Break-of-Bulk Point Transfer points from one form of transportation to another…. Why do you need to transfer? Train to Truck or Ship to Train

Location of Industry Agglomeration- the centralization of features of an industry for the mutual benefit of the industry as a whole Think of your mall…You go to the mall to buy jeans, while walking to get your jeans you see a shirt you want to go with your new jeans, while walking out you buy new shoes. Your intention was to only buy jeans, but you leave with a whole outfit. The whole mall benefited from your intention to buy jeans. The stores compete with one another but they also help each other by bringing in more people. https://www.youtube.com/watch?x-yt-cl=85114404&v=jILgxeNBK_8&x-yt-ts=1422579428&feature=player_embedded

Back to Detroit….. Agglomeration worked for Detroit- Ford, General Motors, & Chrysler all benefited from being near each other Secondary industries, attracted to industrial hub, provided products & services to all three Unions provided quality labor, tires made in nearby Ohio, etc. If everything is so close, what happens to transportation costs? To production costs?

If you were to going to build a factory, in general where could you put it?

Weber’s Least Cost Theory Alfred Weber: Economic Geographer who came up with a theory to describe the location of certain industries Companies need to take into account two things: 1. Source of Raw Materials 2. Location of Market for product The WEIGHT of the raw materials & the WEIGHT of the finished product will determine location of PRODUCTION

Least-Cost Theory Uses Locational Triangle to find least transportation cost location for factory Optimum Point of Production- Total cost of assembling material & distributing the product is at a minimum Each corner of triangle exerts its pull Pull based on transportation cost

Bulk (Weight) Gaining Industry Rubber Plastic An industry where the finished product weighs more than the raw materials The industrial point of production will need to be closer to the market to minimize transportation cost associated with a bulky item Production of Automobiles Automobile Factory MARKET

Bulk Reducing Industry Potatoes Salt An industry where the raw materials weigh more than the finished product The industrial point will need to be located closer to the raw materials Production of Potato Chips Potato Chip Plant MARKET

Brick Bunny Bricks Feathers When a production point is skewed toward the side of the triangle where the raw material is the heaviest Bulk Reducing Resource Bricks vs. Feathers Brithers Production MARKET

Close to Market Close to Resources Market Orientation- Add weight to finished product or finished product is difficult to transport Close to Market Bulky- Automobile Assembly, Furniture Perishable- Baked Goods Weight gain- Beer, Soda Close to Resources Bulky- Lumber, pulp mills, plywood Perishable- Canning and Freezing Weight loss- Copper, Rice and wheat Raw Material Orientation- Difficult or expensive resources to transport

Three Primary Factors Weber Included… 1. Raw Materials Set location 2. Labor Most expensive 3. Transportation Easiest to control through the location of the industry

Weber’s Assumptions 1. Industrial Production Point must be located somewhere within the triangle 2. All parts of the triangle must be uniform in topography 3. Areas in triangle have same political, cultural, & economic values 4. Assumed availability of transportation within all parts of triangle 5. Minimum amount of raw material is available in triangle to make product 6. Labor is infinitely available to any point in triangle 7. As industrialization becomes more global, Weber’s theory begins to change, he assumed industrialization would stay within the same country

Try out Weber’s Theory 1. Mark & label the resource locations on your google map 2. Mark & label the location of your market 3. Draw your triangle from the three points 4. “Guestimate” the weight: Do you have a bulk gaining or reducing industry? 5. Where should the production point go?