Industrial Location
CH. 11, K2&3 and other sources
Industry: Why Do Industries
Have Different Distributions
Site and Situation Factors; Location Obstacles
Terms
• Bulk-reducing industry: final product weighs less than its inputs
(industry locates near source of inputs)
• Bulk-gaining industry: final product weighs more than its inputs
• Break-of-Bulk point: location where transfer between transport
modes occurs (goods transferred from dock to trucks)
• Labor intensive industry: cost of labor is high percentage of expense
(large amounts of labor)
• Footloose industry: can locate in variety of places without greatly
influencing costs (cost of products do not change despite where
product is assembled)
Industrial Location Factors
• Situation factors
• Proximity to inputs (materials)
• Proximity to markets (who wants it?)
• Transport choices (canals, railroads, highways)
• Site factors
• Labor (who will work for you? and how little can you
pay them?)
• Land (is the land suitable?)
• Capital (machines, tools, infrastructure, $$$)
Weber’s Model for Industry Location
• Least cost theory has three factors
•
•
•
Transportation
Labor
Agglomeration (clustering of supporting industry)
• Developed 1909; inflexible
• Businesses can juggle costs (substitution principle)
Steel Mill Location Lab
• Work in partners
• Get one direction sheet and one answer sheet
• Turn in answer sheet, give back direction sheet
• 4 minute silent reading period
• Look at map key, read descriptions in directions
• 20’ to work
Site Selection for Saturn
Head to
Edmodo,
download the
documents
for the Saturn
case study
Read the questions
you need to answer
before you read the
case study
• Why would
Volvo open a
manufacturing
plant in SC?
Examples
• Bulk-reducing industry: Steel industries relocating
near the source.
• Bulk-gaining industry:
• Break of Bulk Point
• Labor Intensive Industry
• Footloose Industry
Situation Factors for industry
• Location near inputs
• Bulk reducing
• Location near markets
• Bulk gaining
• Transport modes available
Copper Industry in North America
Copper Mine in Arizona
Integrated
Steel Mills
Turn and Talk:
Describe the spatial
patterns of integrated
steel mills.
Steel making is bulk
reducing. How does this
affect the pattern you see
on this map?
Nucor Steel Minimills (use recycled steel)
Turn and Talk:
Describe how the
location of steel
mills has changed
• Has the steel
industry
become more
footloose?
U.S. Steel Mill (Gary, Indiana)
Bottling plants – Bulk Gaining Industry
Turn and Talk
- If beverage
bottling is bulk
gaining, how
does this fact
help explain
the distribution
seen on this
map?
Chevrolet Assembly Plants, 1955
Chevrolet
Assembly Plants,
2007
Site factors for Industry
• Land factors
• Urban, suburban, or rural?
• Transportation?
• topography
• Labor factors
• Are there enough people to work?
• Need skilled or unskilled?
• Union or right-to-work?
• Capital
• Where can you get loans?
BMW Local Scale Case Study
• Head to Edmodo and download docs
Labor Cost per Hour
MDCs and LDCs