Weber's Least Cost Theory

James K.

The Theory

Weber's Least Cost Theory explained the location of industries in three main factors; Transportation, Labor, and Agglomeration.

Bulk Industries

Bulk-Reducing Industries: Industries that locate their factories close to raw materials because the raw materials are heavier and bulkier than the finished products, such as the American Copper industry, or businesses in the Oil Industry. They can't move the raw resources with ease, so they operate on the site. This is a clear representation of the Transportation aspect of Weber's Least Cost Theory.

Bulk-Gaining Industries: Factories that are located due to accessibility to the market, such as manufacturers of food or hygienic products. Because they are light and easy to transport, their only issue is the time it takes to be delivered, which they can solve by being much closer to the businesses that sell them.