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Geographical Industrial Factors
What are the different factors when deciding where to put a factory or a store?
Site & Situation • Both contribute to the industrial development of some countries while keeping others reliant on agricultural sectors • Some locations may have great site & situation, others may have good site, but bad situation
Geographic Factors for Industry • • Site Internal Characteristics of a place based on its physical features • New Orleans has poor site because it’s below sea level • • Situation Relationship that a location has with locations around it (Relative) • Pittsburgh & Detroit have good situations-resources
Pittsburgh- Why Steel? IRON ORE COAL Rivers
Detroit: Why cars? • What about Detroit’s Situation gave it an advantage for the auto industry?
Detroit & Pittsburgh established Basic Industries • Basic Industry- focal point of the economy of a city • Pittsburgh's basic industry? • Detroit’s? • Silicon Valley, CA? • Minneapolis? Steel Automobiles Computer Chips Milling
Non-basic industry • A secondary business that sprouts up after the city has been established • Construction needed to build homes for the workers in the city’s basic industry
Multiplier Effect • All three businesses together form the multiplier effect: • The expansion of the economic base of a city as a result of the basic & non-basic industries located there • Steel industry led to barge industry
Industrial Factors • Industrial Costs • Transportation Systems: – Trucks – Trains – Airplanes – Pipelines – Ships
Industrial Costs • Fixed Costs • Do not fluctuate based on the quantity ordered • Variable Costs • Fluctuate based on the volume of the order
Transportation Systems • The greater the distance traveled & the weight of the products, the greater cost to transport them • Time-Space Compression- effort to increase the efficiency of time in the delivery process by diminishing distance obstacles • Internet has sped up how fast industries can deliver products
5 Primary Forms of Industrial Transportation • Trucks – Highly mobile, delays from weather, traffic jams, use of fossil fuels, maintenance costs • Trains – Can haul A LOT very long distances, more fuel efficient, lack of route flexibility, only land travel • Airplanes – Super Fast, flexible routes, very expensive, low fuel efficiency, weather delays • Pipelines – Efficient way to move gas or liquid products, but only these things • Ships – Most energy efficient, slowest method, require access to waterways, weather dependent
Break-of-Bulk Point • Transfer points from one form of transportation to another…. • Why do you need to transfer? • Train to Truck or Ship to Train
Location of Industry • Agglomeration- the centralization of features of an industry for the mutual benefit of the industry as a whole • Think of your mall…You go to the mall to buy jeans, while walking to get your jeans you see a shirt you want to go with your new jeans, while walking out you buy new shoes. Your intention was to only buy jeans, but you leave with a whole outfit. The whole mall benefited from your intention to buy jeans. The stores compete with one another but they also help each other by bringing in more people. • https: //www. youtube. com/watch? x-yt-cl=85114404&v=j. ILgxe. NBK_8&x-ytts=1422579428&feature=player_embedded
Back to Detroit…. . • Agglomeration worked for Detroit- Ford, General Motors, & Chrysler all benefited from being near each other • Secondary industries, attracted to industrial hub, provided products & services to all three • Unions provided quality labor, tires made in nearby Ohio, etc. • If everything is so close, what happens to transportation costs? To production costs?
If you were to going to build a factory, in general where could you put it?
Weber’s Least Cost Theory • Alfred Weber: Economic Geographer who came up with a theory to describe the location of certain industries • Companies need to take into account two things: 1. Source of Raw Materials 2. Location of Market for product • The WEIGHT of the raw materials & the WEIGHT of the finished product will determine location of PRODUCTION
Least-Cost Theory • Uses Locational Triangle to find least transportation cost location for factory – Optimum Point of Production- Total cost of assembling material & distributing the product is at a minimum – Each corner of triangle exerts its pull • Pull based on transportation cost
Bulk (Weight) Gaining Industry Rubber Plastic • An industry where the finished product weighs more than the raw materials • The industrial point of production will need to be closer to the market to minimize transportation cost associated with a bulky item • Production of Automobiles Automobile Factory MARKET
Bulk Reducing Industry • An industry where the raw materials weigh more than the finished product • The industrial point will need to be located closer to the raw materials • Production of Potato Chips Potatoes Salt Potato Chip Plant MARKET
Brick Bunny Bricks Feathers Brithers Production MARKET • When a production point is skewed toward the side of the triangle where the raw material is the heaviest • Bulk Reducing Resource • Bricks vs. Feathers
Market Orientation- Add weight to finished product or finished product is difficult to transport Bulky- Automobile Assembly, Furniture Perishable- Baked Goods Weight gain- Beer, Soda Bulky- Lumber, pulp mills, plywood Perishable- Canning and Freezing Weight loss- Copper, Rice and wheat Raw Material Orientation- Difficult or expensive resources to transport
Three Primary Factors Weber Included… 1. Raw Materials – Set location 2. Labor – Most expensive 3. Transportation – Easiest to control through the location of the industry
Weber’s Assumptions 1. Industrial Production Point must be located somewhere within the triangle 2. All parts of the triangle must be uniform in topography 3. Areas in triangle have same political, cultural, & economic values 4. Assumed availability of transportation within all parts of triangle 5. Minimum amount of raw material is available in triangle to make product 6. Labor is infinitely available to any point in triangle 7. As industrialization becomes more global, Weber’s theory begins to change, he assumed industrialization would stay within the same country
Try out Weber’s Theory 1. Mark & label the resource locations on your google map 2. Mark & label the location of your market 3. Draw your triangle from the three points 4. “Guestimate” the weight: Do you have a bulk gaining or reducing industry? 5. Where should the production point go?