Weber's Least Cost Theory
by Anthony and Ashlyn
WHAT IS IT?!
1. Transportation- the ability (cost wise) to move a product
2. Labor- the sum cost of using human beings to produce the product
3. Agglomeration- the ability to be interdependent between corporations
BULK-REDUCING AND BULK-GAINING INDUSTRIES
Bulk-Gaining Industries: when corporations locate themselves near markets allowing for increased sales of their products
EXAMPLES OF BULK-REDUCING INDUSTRIES
EXAMPLES1. Heavy metals such as steel for guarding fences
2. Metals such as copper
Both of these examples are extremely expensive to transport so the factories are located nearby as to lower transportation costs.
EXAMPLES OF BULK-GAINING INDUSTRIES
EXAMPLES1. Soft drink companies
2. Produce companies
Both of these industries are focused on selling to markets and need to be close to them so that they make more profit and diminish cost for transport to the markets.