Weber's Least Cost Theory
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; which affected location.
Bulk Reducing/ Gaining industries
Bulk Reducing - usually locate factories close to raw materials because the raw materials are heavier and bulkier than finished products.
Bulk Gaining - factory locations that are usually determined by accessibility to the market.
Bulk Reducing industries examples
- An industry in which the inputs (materials, etc.) weighs more than the final product
- is usually located near its source of inputs to minimize transportation costs
- is related to the least cost theory by; having the location close to the main market
Bulk Gaining Industries examples
- Industry that makes something that gains volume or weight during production
- Needs to be located near where the product is sold to minimize transportation,so it doesn't cost more expensive to transport
- is related to the least cost theory by; being located close to the market to reduce cost