The document discusses theories of plant location proposed by Alfred Weber and Sargent Florence. Weber's theory analyzed transportation and labor costs, classifying factors as primary (regional) or secondary. Florence developed a statistical approach using the location quotient and coefficient of localization to quantify industry concentration in regions based on employment. While providing insights, Florence's theory does not explain rationale for distributions or guide future locations.

1. Dr. Sunita Sukhija
Assistant Professor in Commerce
Govt. National College, Sirsa(HRY)

2.  Plant location refers to the choice of the region where man,
materials, money, machines and equipment’s are brought
together for setting up a plant. A plant is a place where the
cost of the production is kept to low in order to maximise
gains. Selection of plant is very important because once
plant is located at a site then the organisation must face the
pros and cons of that initial decision. There are three major
aspect of plant location. These are:
 i. Region decision
 ii. City or suburb decision
 iii. Site decision

3.  Plant location is one of the most critical decisions that
influences the success of an industry. The factors that
influences plant locations are as follows:
 i. Nearness and accessibility to raw materials
 ii. Nearness to market
 iii. Availability of power
 iv. Availability of labour
 v. Availability of capital
 vi. Transport and communication facilities
 vii. Availability of soil, climate and topography
 viii. Momentum of early start
 ix. Political stability
 x. State policy
 Xi. Complementary industries
 xii. Competing industries

4.  Merits
 i. Reputation of the place
 ii. Availability of adequate capital
 iii. Adequate supply of workers
 iv. Increase in efficiency of workers
 v. Use of modern technology
 vi. Better research and development
facilities
 vii. Growth of supplementary and
subsidiary industries
 viii. Development of transport and
communication
 ix. Increase in mutual corporation
among industries
 x. Reduction in costs
 Demerits
 i. Fear of depression
 ii. Unbalanced economic
growth of the country
 iii. Lack of mobility of
workers
 iv. Danger of
unemployment
 v. Danger of attacks
 vi. Decrease in the
efficiency of workers
 vii. Defects of industrial
centres

5.  Alfred Weber was a German economist. Alfred Weber is
regarded as the father of theory of location. His book the
theory of location Industries was published initially in
German language in 1909. His theory is based on deductive
method. He has classified the factor which affect plant
location into two broad categories-
 1. Regional factor or primary factor
 2. Secondary factor
 The factors which influence the regional distribution of
industry significantly are termed as regional factors or
primary factors. On the other hand, the factor causing
concentration or dispersal of industries are termed as
secondary factors.

6.  According to Weber, in the determination of location of industrial
unit there are two important costs or factors. These are:-
 a) Cost of transportation
 b) Cost of Labour.
 a) Transportation costs: - In order to make the analysis simple, it has
been assumed that other factors like labour etc are non- existent. In
other words, the cost of other factors will remain same everywhere.
Accordingly, industries will be located at a place where the cost of
transportation will be minimum. Here, transport cost includes the cost
of transporting raw material from the point of supplier or origin to the
point of manufacture and the cost of transporting finished goods from
the place of manufacture (Plant) to the place of consumption, (Market).
The cost of transportation depends upon following factors:
 a) Weight to be transported
 b) Distance to be covered

7.  Weber has divided the raw material into two categories:
 a) Ubiquitous material
 b) Localised material
 Ubiquitous materials are those which are normally found in abundance
in almost all the regions, such as wood, soil, water, etc. These are
virtually the free gift of nature. Whereas Localised raw material is those
which are found at specific places such as sugarcane, cotton, iron ore,
coal and other agriculture and mineral produces or materials. Further,
Weber has divided the localised raw material into two categories on the
basis of their weight losing nature. These are:
 a) Pure material
 b) Gross material
 c) Cost of labour - Weber has recognised the cost of labour as the
secondary regional factordetermining the location of industrial unit. It
may be noted that till now factors cost (labour cost) was considered to
be equal everywhere. It was assumed that the industry would be located
at such places where transport costs would be the minimum.

8.  According to Weber, location of industry is not only influenced by the regional
factors but by other factors. There are two broad categories of secondary factors.
 These are:
 a) Aglomerative factors and
 b) Deglomerative factors
 Aglomerative factors are those which causes the concentration of industries at one
place. When industries concentrate at one place due to the regional factors, these
obtain several other benefits without making any individual effort. These benefits are
known as external economies. Therefore, external economies act as agglomerative
factors. The external economies relate to
 a) Availability of machines and other technical components,
 b) Availability of repair and replacement facilities
 c) Availability of necessary skilled labour for specific industries
 d) Availability of organised markets both for procuring raw materials and
distributing
 finished products
 e) Availability of better banking, insurance, transport and communication facilities
 f) Momentum of early start
 g) Development of ancillary industries, etc

9.  Productive activities could be divided depending on the
nature of raw-materials, industry and market. Weber
considers the location for an industry at more than one
place. According to Weber, a split of production into
several locations will be the rule for productive process
which can technically be split.
 Locational Coupling may also occur due to connection
through materials. Weber also conceived the advantages of
setting up different types of industries in the same locality.
If the by-product of an industry happens to be the raw
material of another industry, then the two industries may
select a single place of location.

10.  Weber has concentrated on only two elements of cost of
transportation weight and distance. In reality, there are several
other factors also influence the cost of transportation, such as
mode of transportation etc.
 Weber has assumed that the centres of labour supply are fixed.
At these assumptions are unrealistic. With increase in mobility of
labour, this assumption of labour centres has become
insignificant.
 Weber has assumed that points of consumption are fixed and he
has calculated the cost of transporting goods from the point of
manufacture to the point of consumption, i.e. market.
 Weber’s has classified the factors influencing plant location into
two parts- regional factor like transport cost and labour cost and
secondary factor agglomerative factor and deglomerative factor.
 Weber has classified the raw material into two parts- ubiquitous
and localised

11.  Sargent Florence, an English economist, published his book
“Investment, Location and Size of plant” in 1948. He
scientifically studied the problem of industrial location. As
against the Weber’s theory of location of industries based on
deductive method, Florence theory of location is based on
inductive method backed statistical techniques. The relation of
an industry to an area is not so important as the relation of the
industry to the distribution of the occupied population as a
whole. Sargent Florence theory of industrial location is based
on two new concepts. These are:
 • Location Quotient
 • Coefficient of localisation

12.  Location quotient is an index. This index shows the degree of
concentration of an industry in a particular region or state.
According to P.GGadgil and P.L.Gidgil,” The underlying idea
of such an index is that location should be construed as the
degree of dissimilarity between the geographical distribution
of the industry and the population of the country.”
 In this way, location quotient refers to the ratio of the (i) the
percent of all industrial workers in a particular industry found
in a particular region or state (ii) to the percentage of all
industrial workers in that region or state This index may be
obtained in another way. That is, by taking the percentage of
total industrial workers in a particular industry found in a
certain region and dividing it by the percentage of total
industrial workers in thee same industry in the country.

13. this is another statistical technique used by Sargent Florence to
study the problem of localisation.
This Co-efficient reveal the concentration tendency of an
industry. In other words, it is not related to the concentration of
an industry in a certain region, but it is related to the tendency
of concentration of an industry in a certain region in the
country. It is arrived at the following manners:
 i. Percentage of workers in each region I relation to the total
workers in the country.
 ii. Percentage of workers in a certain industry in each region in
relation to the total workers in the country in that industry.

14.  a) The theory is based on inductive method.
 b) Analysis has been done by applying statistical tools
 c) The theory reveals the existing state of distribution of
industry in a country.
 d) The theory shows the tendency of concentration of an
industry in a particular place.
 e) The theory rests on the number of the workers employed
both in each region and throughout the country.
 f) The theory is of great help in analysing the locational
dynamics in a country.

15.  a. This theory simply explains the existing state of industries in
a country, but fails to explain the rationale of the distribution of
industries in different region in the country.
 b. This theory fails to explain the impact of secondary factors on
the location of industry. In reality, at time, industry is located at
a particular place with due concentration of such factors.
 c. This theory cannot act as a guide for the future location of
industries in a region.
 d. This theory is silent on ideal location for new industries.
Perhaps, Sargent Florence accepts tacitly the theory of Weber
on the issue.
 e. Location quotient is not a reliable index for measuring the
degree of concentration or dispersal of an industry in a certain
region because it is fully based on the number of workers.