WEBER MODEL OFINDUSTRIAL LOCATION  •   Model used to predict the location of      an industry.                            ...
AssumptionsNumerous, competitive, single-plant firmsTransportation costs: a linear function of distance  Producers (fir...
ASSUMPTIONS •   Raw material were not evenly     distributed. •   Ubiquitous Raw materials-those found     everywhere •   ...
WEBER LEAST COSTLOCATION THEORYWeber produced two types of locationaldiagrams:1. A straight line to show examples where on...
STRAIGHT LINE DIAGRAM               One ubiquitous and one               pure RM                   U                      ...
STRAIGHT LINE DIAGRAM               One ubiquitous and one gross RM                    U                                  ...
LRM     (pure)                         Localised Raw                                    Material                          ...
Two Gross RMs                    LR   LRM                    M    (pure)LRM(gross)                  Least-cost            ...
Solutions to Weber’s Location Problems
FACTORS AFFECTING    PRODUCTION COSTS•   Cost of Raw Material•   Cost of transportation•   Cost of labor•   Agglomeration/...
ISOTIMS AND ISODAPANES•   Since transportation costs were the most    important factor affecting production, weber    prod...
ISOTIMS
Isotims and Isodapanes 2 sets of   isotim               $30 assembly            $25    cost      +           $20distributi...
Alfred Weber, 1909Labour costs: Isotims   Labour costs as    “distortion” to basic    transport costs pattern   Isotim  ...
Case 7: Two Weight-losing raw materialsIsocost lines: concentric rings that connect equal-cost points (isotims) around RM1...
ISODAPANES   We can find total transport cost for as many    points as we want. And we can connect all the    equal cost ...
Total transportation costs (TTC) are simply the sum of isotims at anypoint on the graphE.g., At X, TTC = 3 + 2 + 2 = 7
Alfred Weber, 1909Labour costs - Isodapanes   Isodapane       Line of total transport costs       Determined by summing...
AGGLOMERATIONIndustrial location may be swayed by agglomerationeconomies. The savings which would be madeif, say, three fi...
Alfred Weber, 1909Overlapping critical isodapanes   Agglomeration    economies
Stage 2 - add in Agglomeration          Economies
Weber  least cost location theory
Weber  least cost location theory
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Weber least cost location theory

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Summary of Weber Model of least cost location

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Weber least cost location theory

  1. 1. WEBER MODEL OFINDUSTRIAL LOCATION • Model used to predict the location of an industry. Keniesha Brown
  2. 2. AssumptionsNumerous, competitive, single-plant firmsTransportation costs: a linear function of distance Producers (firms) face no risk or uncertainty Infinite demand for a product at a given price Identical production technology everywhere (i.e., uniform per unit production costs)
  3. 3. ASSUMPTIONS • Raw material were not evenly distributed. • Ubiquitous Raw materials-those found everywhere • Localised Raw Material-gross and pure
  4. 4. WEBER LEAST COSTLOCATION THEORYWeber produced two types of locationaldiagrams:1. A straight line to show examples where one raw material is localised (pure or gross).2. A locational triangle to show when two localised raw materials were involved.
  5. 5. STRAIGHT LINE DIAGRAM One ubiquitous and one pure RM U U M LRM (pure) U Ubiquitous raw materialLR LRMM (pure) Least-cost locationM Market
  6. 6. STRAIGHT LINE DIAGRAM One ubiquitous and one gross RM U U U M LRM U (gross) U Ubiquitous raw materialLR LRMM (pure) Least-cost locationM Market
  7. 7. LRM (pure) Localised Raw Material Least-cost location M (pure) M MarketOne pureRM, one Mgross RM LCL will move towards the source of the gross LRM material if there is a (gross) heavy weight loss
  8. 8. Two Gross RMs LR LRM M (pure)LRM(gross) Least-cost location M Market M LRM
  9. 9. Solutions to Weber’s Location Problems
  10. 10. FACTORS AFFECTING PRODUCTION COSTS• Cost of Raw Material• Cost of transportation• Cost of labor• Agglomeration/deglomeration economies of scale
  11. 11. ISOTIMS AND ISODAPANES• Since transportation costs were the most important factor affecting production, weber produced a map which would be able to determine the least cost location (LCL)
  12. 12. ISOTIMS
  13. 13. Isotims and Isodapanes 2 sets of isotim $30 assembly $25 cost + $20distribution cost Total transport cost Isodapane
  14. 14. Alfred Weber, 1909Labour costs: Isotims Labour costs as “distortion” to basic transport costs pattern Isotim  Line of equal transport cost for any material, RM or FP  “X” has cost of $3.
  15. 15. Case 7: Two Weight-losing raw materialsIsocost lines: concentric rings that connect equal-cost points (isotims) around RM1, RM2and MKT Weber called the isocost lines corresponding to each point location isotims
  16. 16. ISODAPANES We can find total transport cost for as many points as we want. And we can connect all the equal cost or equal value total transport cost points to produce what Weber termed isodapanes. In three dimensions, the graph of isodapanes would look like a bowl or depression in the space-cost surface. In two dimensions, it looks like a U. Clearly, the optimal location is in the trough of the depression.
  17. 17. Total transportation costs (TTC) are simply the sum of isotims at anypoint on the graphE.g., At X, TTC = 3 + 2 + 2 = 7
  18. 18. Alfred Weber, 1909Labour costs - Isodapanes Isodapane  Line of total transport costs  Determined by summing the value of all isotims at a point  And joining all points of equal total transport costs
  19. 19. AGGLOMERATIONIndustrial location may be swayed by agglomerationeconomies. The savings which would be madeif, say, three firms were to locate together, are calculatedfor each plant. The isodapane with that value is drawnaround the three least-cost locations. If theseisodapanes overlap, it would be profitable for all three tolocate together in the area of overlap.
  20. 20. Alfred Weber, 1909Overlapping critical isodapanes Agglomeration economies
  21. 21. Stage 2 - add in Agglomeration Economies

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