Alfred Weber formulated a theory of industrial location in which an industry is located where the transportation costs of raw materials and final product is a minimum. Usually this is a case of some ubiquitous (everywhere available) raw material such as water being incorporated into the product.
Conquest theory is when a person or a group of people take control of an area and make everyone in that area follow their rules and beliefs.
USA. Von Thünen's Model of Land Use. Early in the 19th century Johann Heinrich von Thünen (1783-1850) developed a model of land use that showed how market processes could determine how land in different locations would be used. Von Thünen was a skilled farmer who was knowledgable in economics.
Terms in this set (19) Model developed by Alfred Weber according to which the location of manufacturing establishments is determined by the minimization of three critical expenses: labor, transportation, and agglomeration. A process involving the clustering or concentrating of people or activities.
The following are the characteristics of economic activities:
- Wealth Producing Activities:
- Satisfying Human Wants:
- Money Income:
- Developmental Activities:
- Proper Allocation of Resources:
- Optimum Use of Resources:
Central place theory is a geographical theory that seeks to explain the number, size and location of human settlements in an urban system. The theory was created by the german geographer walter christaller, who asserted that settlements simply functioned as 'central places' providing services to surrounding areas.
Agricultural location theory deals with both the location - allocation process of land uses by farmers, and the spatial organization of agricultural land uses. Ricardo's theory emphasized the physical qualities of land and urban demand as major determinants in rent production.
According to Weber, three main factors influence industrial location; transport costs, labor costs, and agglomeration economies. Location thus implies an optimal consideration of these factors.
Location is the place where a firm decides to site its operations. Location decisions can have a big impact on costs and revenues. A business needs to decide on the best location taking into account factors such as: Customers - is the location convenient for customers?
Entrepreneur Jake Fox reveals the key factors a business needs to consider when selecting a new location.
- Accessibility. Does your business rely on frequent deliveries?
- Security.
- Competition.
- Business Rates.
- Skill base in the area.
- Potential for growth.
Industrial location factors
- power supply.
- communications - including transport, telecommunications.
- labour supply - including workers with the right skills.
- access to market - where the goods are sold.
- grants and financial incentives - usually from governments.
- raw materials.
The Von Thunen model is an excellent illustration of the balance between land cost and transportation costs. As one gets closer to a city, the price of land increases. The farmers of the Isolated State balance the cost of transportation, land, and profit and produce the most cost-effective product for market.
Organic Theory. A nation which is an aggregate of organisms would itself function and behave as an organism. Heartland Theory. a geopolitical hypothesis proposed by British geographer Harold Mackinder that states that any political power based in the heart of Eurasia could gain strength to eventually dominate the world
How is a location's economic activity related to its physical geography? Locations of resources affect the ways people live, make, transport, and use goods.
What is the most important element when determining the location of an manufacturing plant, using Webers least cost theory? The availability to Transportation, because you need to be able to access raw material, essential and non-essential goods.
What is locational rent? It is the difference between the revenue received by a farmer for a crop grown on a piece of land and the total cost of producing and transporting that crop. It is therefore the profit from a unit of land.
Leaning heavily on work developed by the relatively unknown Wilhelm Launhardt, Alfred Weber formulated a least cost theory of industrial location which tries to explain and predict the locational pattern of the industry at a macro-scale. It emphasizes that firms seek a site of minimum transport and labor cost.
The ubiquitous raw materials are found everywhere. This raw material is freely bestowed on earth, e.g., water, air, soil etc. The localized raw materials are confined only in some selected places on earth, e.g. iron ore, coal, bauxite etc.
Industrial planning is very important considering the environmental aspects and its effect on people. Therefore, various factories and industries should be located in such a place that the pollution caused by them doesn't affect the environment and people much.
Weight loosing raw materials are materials which weigh less after getting manufactured than what should have been there weight as a raw material. For example, copper taken as a raw material may weigh around 500 grams but after getting manufactured as a tool it weighs about 300 grams.
A separate branch of economics bordering with the discipline of geography which is known as Industrial location or Vocational Analysis, deals with the element of the locational or spatial decision making. A manufacturer has to consider several technical economic and institutional factors for this.
Locational Coupling:Weber along with split in location has also given the idea of locational coupling, meaning thereby that different types of industries can be coupled in one and the same locality. Locational coupling can also be due to market connection between two industries.
Alfred Weber'sLeast Cost Theory
- Created the classical model of industrial location theory in 1909.
- Explains the optimum location of a manufacturing establishment in terms of the owner's desire to minimize three basic expenses.
Weight-losing industries are industries where the raw materials are relatively bulky, but the resulting product is relatively smaller.
Weight-gaining industries are industries where the raw materials are relatively small, but these are converted to produce a bulky finished product.
