Webers Least Cost Theory

by: Mikayla Cook & Madeline Gierkey

What is Weber's Least Cost Theory?

Webers least cost theory is a model of location theory designed to explain why economic activity is patterned where it is in secondary industries. The focus of this theory is if an industry is minimizing cost, they are maximizing profit. This theory has 3 major categories; transportation, labor, & agglomeration.

bulk-gaining industry

A bulk gaining industry is an industry whose products increase in size or weight during manufacturing. Soda is an example of this industry because this industry because the bottles that were empty, get filled with soda which makes them gain weight. This process they undergo is done by machines which makes labor cost cheaper. Making refrigerators is another example of bulk gaining industries. Parts are made individually, and may be lightweight, but when combined to make the final product, it creates a heavy fridge. Ships become most effective when it comes to transporting the heavy fridges long distances. Fridge companies may all agglomerate & share certain factories, such as part sources or facilities.

bulk-reducing industry

Bulk Reducing industries usually locate factories close to raw materials. They do this because of how heavier & bulkier the materials are than the finished factories. The north american copper industry is an example of a bulk reducing industry. The factories mainly use big trucks to ship off since its cheaper. Most of the labor is now done with high tech machines that can be operated by people. Although the machines are very expensive to get and operate, it is a lot quicker and more cost efficient than having people mine the copper by themselves. Also, factories will cluster in certain geographical areas that contain a lot of copper. Another example of a bulk reducing industry would be a lumber service. Lumber services transport trees to factories, there the trees get turned into finalized products. Lumber can be transported either by boat or truck depending on where its going and why. Currently labor isnt as costly because most of the cutting down of trees is done by machines which are operated by people. Lumber services tend to be located in mountainous or woodsy areas, and factories will agglomerate together around the common resource needed (trees).