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

2. Who? Alfred Weber (1868-1958) 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. 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”
Inputs weight more that final product.
Weight is lost during the production process
Cost of shipping inputs to factory > cost of shipping outputs to market.
Therefore, factory is located near raw materials/ inputs.
Examples: copper, steel, lumber

5. Bulk-Reducing Industry

6. Bulk Reducing Examples
Copper
Steel
Finished copper bar weighs less than the copper ore used to make the product
Several steps in the copper process that are bulk reducing
Most foundries also need to be located close to energy sources (part of inputs)
Steel is an alloy of iron, manufactured by removing the impurities
Two inputs for steel are iron ore and coal, weighs more than the final product
U.S. steel production location has changed b/c of changing inputs
Today, more concerned with being close to markets

7. Bulk Gaining Examples Fabricated Metals Beverage Production
Factory brings together metals (like steel) as inputs and transforms them into a more complex product
Located near markets because products are much bigger
Largest market for fabricated metal and machinery is motor vehicles
¾’s of vehicles sold in the U.S. are assembled in the U.S.
Empty cans or bottles given to producer and filled with beverage- thus adding bulk/weight
Water- heavy to transport, #1 ingredient in beverage

8. Bulk Gaining Industry

9. Bulk Gaining Industry “Market Orientation”
Finished product weighs more than the inputs.
Weight is gained during the production process.
Cost of shipping outputs to market > cost of shipping inputs to factory.
Therefore, factory is located near the market.
Examples: Automobiles, beverages

10. 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

11. The Connection?
Bulk gaining or reducing?
Agglomeration

12. Single Market Manufacturers
Factories that produce products for 1 or 2 customers.
Ex. “We build the seats for Ford cars”
Finished seats are shipped to assembly plant.
Agglomerate near the larger plant.
This allows for “Just In Time” delivery.
Parts are sent to factory right as they are needed…reduces need for warehouse space.

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

14. Perishable Products Must be located near market
Short shelf live/ fast expiration
Bread
Goes bad within the week
Newspaper
Good only for 24 hrs.
“Yesterday’s News!”

15. Other important vocabulary
Footloose industry
Produces a lightweight produce that is very valuable….location not much of an issue!
Computer chips
Technopole
A region of many high tech businesses (agglomeration)
Silicon Valley, CA
Deglomeration
The “unclumping” of similar businesses due to over crowding.

16. Maquiladora
What is it?
In Mexico, a maquiladora (Spanish pronunciation: [makilaˈðoɾa]) or maquila (IPA: [maˈkila])[1] is a manufacturing operation in a free trade zone (FTZ), where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the raw materials' country of origin.

17. Why? NAFTA North American Free Trade Agreement
No tariffs between Canada, US and Mexico (North America)
Became law in January 1994 (signed by Bill Clinton)
Fear- many US firms will relocate to Mexico due to cheaper labor costs and less environmental laws

20. Trends in US “Rust Belt”
Areas in North that were once industrial but due to internal migrations to South and West factories sit empty

21. Population Shifts

22. Population Shift

23. Detroit Depopulation