Manufacturing & Industrial
Location Theory – Chapter 10
• Material Transformation
• Urban→suburban
• Employment source
• Linkages
• Key decision
• Investment in place
• Fixity→Industrial inertia
• Clustering of industrial activity
• Corporate Behaviour
• Recognition of future production
capacity needs
• Options to meet future production
capacity needs
• Adjustment in-situ
• Acquisition
• New plant expansion
• How and who decides? (Org. structure)
• Site selection
Markets: Demand side
factors in industrial
location
• Market orientation
• Final demand: Consumers
• Intermediate demand: Industries
• Transportation costs
• Higher for finished products
• Lower for raw materials
− (But gross raw materials are weight-losing)
Market orientation
• Beverages
• Perishables
• Newspapers
(printing)
Market orientation
• Women’s apparel
(garments)
• High fashion
• Mass production
• Agglomeration
economies
• Components
(e.g. auto parts)
• Minimum cost
location is not always
maximum profit
location!
Production costs
• Factor substitution
• Labour vs. capital vs. land
• e.g. Cattle beef chain
• Ranching
• Feed lots
• Meat packing
• e.g. Plastic Moulds
• e.g. Hair cuts
Labour costs
• Labour intensive, unskilled
Industrial processes
• Textiles
• Clothing
• Footwear
• Low labour cost locations
• Urban → rural (or down urban hierarchy)
• North → south (U.S.)
• Core → periphery
• e.g. Novatel - JRC