1. Weber’s Least Cost Theory of Industrial Location Model
AP Human Geography

2. Review—Least Cost Theory Who?
Alfred Weber ( )
German Economic Geographer
Published Theory of Location of Industries in 1909.
“What is the best (most profitable) location for manufacturing plants?”
“Just because I’m old doesn’t mean I don’t know what I’m talking about!”

3. Least Cost Theory 3 major factors that determine location of manufacturing
1. Transportation (most important)
Raw materials (inputs) to factory
Finished goods (outputs) to market
Distance and weight most important factors.
2. Labor
High labor costs reduce profit
May locate farther from inputs/ market if cheap labor can make up for added transport costs.
3. Agglomeration
Similar businesses cluster in the same area.
Businesses support each other, reduce costs

4. Bulk Reducing Industry “Material Orientation”

5. Bulk-Reducing Industry

6. Bulk Gaining Industry “Market Orientation”

7. Bulk Gaining Industry

8. shorter distance to market
Bulk Reducing
Heavier input, shorter distance to plant
Input Factory Market
Input Factory Market
Lighter output, longer distance to market, lo
Lighter input, longer distance to plant.
Bulk Gaining
Heavier output,
shorter distance to market

9. Single Market Manufacturers

10. Agglomeration, Chicago East Side
Warehouses
Auto Parts Manufacturers
Ford Offices
Assembly Plant

11. Perishable Products

12. Other important vocabulary
Footloose industry
Produces a lightweight produce that is very valuable….location not much of an issue because of the high price the product commands
Technopole
A region of many high tech businesses (agglomeration)
Deglomeration
Break of bulk point
 location along a transport route where goods must be transferred from one carrier to another.

13. Other Important Models
Hotelling Model
Losch Model
Theory developed by economist Harold Hotelling that suggests competitors, in trying to maximize sales, will seek to constrain each other's territory as much as possible which will therefore lead them to locate adjacent to one another in the middle of their collective customer base. ex: Two ice-cream vendors moving closer to each other.
zone of profitability; firms will identify a zone of profitability (not just a point) where income will outpace costs ex: A place w/ low labor costs, easy travel, and resources.