question

Who created the Least Cost Theory?

answer

Alfred Weber

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Weber's Least Cost Theory

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-suggest a company building an industrial plant needs to take into consideration the source of raw materials and the market for the product -weight of the raw materials and finished product will determine the locations of the production facility for that company -tried to describe the industrial location of certain industries in terms of minimization of three basic expenses: relative transportation costs, labor costs, and agglomeration costs

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Locational Triangle

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-base of the triangle consists of two raw materials necessary for the production of the product

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What is the major focus on in the Least Cost Theory?

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variable costs

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What are the three categories of Weber's Least Cost Theory?

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Transportation, Labor, and Agglomeration

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Transportation

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-site chosen must entail the lowest possible cost of moving raw materials to the factory and finished products of the market -most important category

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Labor

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higher labor costs reduce the margin of profit

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Agglomeration

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-the clustering or concentration of people or activities of mutual advantages -close proximity because they share skilled-labor pools and technological and financial amenities -excessive agglomeration leads to high rents, rising wages, and circulation problems -- this leads to industries leaving the urban centers (deglomeration)

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Examples of Agglomeration

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office supplies, infrastructure, professional services

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What did Weber conclude?

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He concluded that transport costs are the major consideration when determining location -optimum location is found where the costs of transporting raw materials to the factory and finished goods to the market are at their lowest

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Five controlling assumptions made by Weber

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1. Area is completely uniform physically, politically, culturally, and technologically (uniform, isotropic, plain) 2. Manufacturing involves a single product to be shipped to a single market whose location is known 3. Inputs involve raw materials from more than one known source location 4. Labor is infinitely available immobile in location 5. Transportation routes are not fixed, but connect origin and destination by the shortest path; and transportation costs directly reflect the weight of items shipped and the distance they are moved

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What does weight represent in Weber's Least Cost Theory?

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the "pull" of raw material and market locations - equilllibrium point is found which would represent the least-cost plant location

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Weight-Gaining Industry

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industry where the finished product weighs more than the raw materials

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Weight-Reducing Industry

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industry where the raw materials weigh more than the finished product

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Entrepot

answer

areas where goods are brought to be reloaded onto other forms of transportation

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Break-Bulk Point

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location where large shipments of goods are broken up into smaller containers for deliver to local markets

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What is another name for Hotelling's Model?

answer

Locational Interdependence Theory

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Locational Interdependence

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when the locational decision of one firm is influenced by locations chosen by its competitors -it influences the manner in which competitive firms with identical cost structures arrange themselves in space to assure themselves a measure of spatial monopoly in their combined market

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What is the major focus of Locational Interdependence?

answer

variable revenue

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What happens if market becomes sensitive to price?

answer

sales to more distant customers is discouraged and prodjucers seeking to maximize sales would again separate

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What does price sensitivity encourage?

answer

industrial dispersion

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What is another name for the Zone of Profitability?

answer

Spatial Margin of Profitability

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Losch's Zone of Profitability

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-spatial influence of consumer demand and production -use formula to determine the point of maximum profit that is usually found in a zone -left and right of zones represent distance decay -other businesses entering/exiting market could change the configuration -anywhere within the margin ensure some profit and tolerates both imperfect knowledge and personal considerations

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Situation Factors

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involve transporting materials to and from a factory. A firm seeks a location that minimizes the cost of transporting inputs to the factory and finished goods to the consumer

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Transportation Situation

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-farther something is transported, the higher the cost -if cost of transporting product exceeds cost of transporting input --build plant closer to consumer -if cost of transporting inputs exceeds cost of transporting product -- build plant closer to inputs

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Inputs

answer

resources from the physical environment or parts or materials made by other companies

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Where will industry locate in order to minimize transportation costs?

answer

near source with most weight or bulk

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Bulk-reducing Industry

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economic activity in which the final product weighs less than its inputs

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Copper Industry

answer

-concentration mills transform heavy, bulky copper into product with much higher value per weight -smelting (removing impurities) -purified copper treated at refineries --not much weight loss-- transport costs less of a factor -source of energy to power processes also plays a role in industry location -majority of copper mines in U.S. are in Arizona

question

Origin of Steel Industry

answer

-steelmaking is a bulk-reducing industry located near iron-ore mines in order to minimize the cost of transporting inputs -Steam engine (James Watt) provided source of power to keep ovens heated for long periods of time -puddling and rolling (Henry Cort) -Bessemer process (Henry Bessemer) efficient process for casting steel

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Puddling

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reheated pig iron until impurities burned off

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Rolling

answer

pig iron rolled through rollers (removes dross)

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U.S. Steel Industry

answer

-began in Pittsburgh, Pennsylvania (mid 1800s) -coal and iron ore plentiful -areas around Lake Erie (late 1800s) -iron ore in Mesabi Range transported through Great Lakes -coal transported from Appalachian Mountains -area of southern Lake Michigan (early 1900s) -closer to Mesabi Range -coal from southern Illinois and Appalachia -near East and West coasts (first half of 1900s) -coastal locations - change in transportation costs -imported more iron from other countries -currently near southern Lake Michigan and the East Coast -success based on access to markets - no inputs

question

Minimills

answer

-increased in importance -generally one steop in the process of steel making -located near markets and have scrap metal readily available

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Fabricated Metals and Machinery

answer

• Motor vehicles largest sales of fabricated metals and machinery - About 60 final assembly plants and parts from several thousand other plants - Final assembly plants located in "auto alley" • Corridor between Michigan and Alabama - interstates • Minimizing transportation to market is critical factor - Distribution of assembly plants has changed • Historically, North America divided into regions with assembly plant in or near large metropolitan area • Recently, assembly plants placed in interior because of the change in market (diversity of products - variety of models)

question

Perishable Products

answer

-must be located near markets for rapid delivery -if goods spoil before delivery, they become useless and a waste of money

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Time-Space Compression

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the effort to increase the efficiency of time in the delivery process by diminishing distance obstacles -greater the distance traveled and the weight of the products, the greater the cost -as distance decreases so does transportation costs

question

Name the five primary forms of industrial transportation.

answer

trucks, trains, airplanes, pipelines, and ships

question

Transportation Choices

answer

ship, rail, truck, or air

question

Trucks

answer

-highly mobile and efficient that can go almost anywhere -most used form of industrial transportation DISADVANTAGES: - Delays due to weather, traffic, and weight of truck - Use fossil fuels that harm the environment - Have high maintenance costs

question

Trains

answer

-One of most efficient and cost-effective -Can haul immense amount of freight for long distances and have become more fuel efficient DISADVANTAGES: - Lack of flexibility on routes - inability to cross oceans - Operating costs are high (high amount of rarely used tracks)

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Airplanes

answer

-Fastest way to get products to market -High degree of flexibility regarding routes, but most freight must go through break-of-bulk point DISADVANTAGES: - Fuel efficiency very low and fuel costs high - Can experience weather delays

question

Pipelines

answer

-Highly efficient way of moving gas or liquid products (one of safest ways to haul these products) -Generally limited to the transportation of natural resources from their extraction or mining points to production facilities DISADVANTAGES: - Only haul gas or liquid products - Very expensive to build and difficult to move any section - Environmental studies need to be conducted before construction

question

Ships

answer

-most energy-efficient means of transportation -average cost per distance traveled lowest of five means of transportation -slowest method DISADVANTAGES: -many industrial plants lack access to waterways -dependent on weather

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Site Factors

answer

result from the unique characteristics of location

question

Name the three traditional production factors that may vary among locations.

answer

land, labor, and capital

question

Which is the most important factor at a global scale?

answer

labor

question

Labor Site Factor

answer

-Textile and apparel production is an industry that requires less-skilled, low-cost workers -6% of dollar value of world manufacturing, but 14% of world manufacturing employment -Textile industry most dependent on low-cost labor - Most textile production takes place in less-developed countries

question

Land Site Factor

answer

-Land not always critical factor in industrial location because suitable land can be found in many places -Land is critical when considering natural and human resources - Factors include climate, topography, cultural and recreational activities, cost of living - Some industries chosen for low-cost energy sources -Historically - water, coal, and electricity

question

Capital Site Factor

answer

-the wealth, whether in money or property, owned or employed in business by an individual, firm, corporation, etc. -Many new industries borrow capital in order to begin or expand industry - Silicon Valley (California) banks willing to invest where other parts of country were not -Availability to borrow money (capital) critical factor for industry in LDCs - Banks in LDCs lack funds - MDCs won't loan if country seems unstable

question

Capital-intensive Industry

answer

industry in which wages and other compensation paid to employees constitute a low percentage of expenses

question

Labor-intensive Industry

answer

industry in which wages and other compensation paid to employees constitute a high percentage of expenses (NOT THE SAME AS HIGH-WAGE INDUSTRY)

question

Name all the New Industrial Regions

answer

Asia, Latin America, and "Central" Europe

question

Asian Industrial Region

answer

-China largest manufacturer of textiles and apparel, steel and other household products -Two principal assets - World's largest supply of low-cost labor - World's largest market for many consumer products -Policy changes reduced trade restrictions and opened borders to transnational corporations

question

Latin American Industrial Region

answer

-Mexico and Brazil leading industrial centers -Latin American setbacks in 1960's and 1980's - Isolation through import reduction and policies -Manufacturing in Mexico increased with the maquiladora, but now they are in decline

question

"Central" European Industrial Region

answer

-Countries east of Germany and west of Russia have become major industrial centers - Poland, Czech Republic, Hungary, etc. -Central Europe offers combination of two important site and situation factors - Affordable labor -Less-skilled, but lower cost than western Europe -More-skilled, but higher cost than Asia and Latin America - Market proximity

question

Attraction of New Industrial Regions

answer

-Textile and apparel production in the United States moved from the Northeast to the Southeast during the mid-twentieth century - Previously located in Northeast because of cheap immigrant labor -Wages are lower in Southeast because workers showed little interest in joining unions - Wages lower in the Southeast, but still higher than Southeastern workers receiving for other work -Southeastern mills now able to reach markets easier with the opening of interstate highway system

question

Intraregional Shifts

answer

many factories in the city for combination of factors like proximity to market and convenience in shipping to national market, proximity to labor and sources of capita

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Interregional Shifts

answer

diffused from traditional industrial centers in NW Europe to southern and eastern Europe

question

Outsourcing

answer

decision by a corporation to turn over much of the responsibility for production to independent suppliers

question

New International Division of Labor

answer

-transfer of some types of jobs, especially those requiring low-paid, less-skilled workers, from more developed to less developed countries - Also called the global division of labor - Began in the 1960s and has led to a loss of manufacturing jobs in more developed countries and an increase in employment opportunities in less developed countries

question

Maquiladoras

answer

industrial plants located in Mexico that produce goods using relatively inexpensive labor and then sell the products in the United States for more profit than if made in the U.S.

question

Footloose Industries

answer

company with no allegiance or ties to a country, so it can move its primary locations at will

question

Fordist Production

answer

form of massed production in which each worker is assigned one specific task to perform repeatedly

question

Post-Fordist Production

answer

Adoption by companies of flexible work rules, such as the allocation of workers to teams that perform a variety of tasks

question

Name the 3 types of Post-Fordist Production

answer

teams, problem-solving, and leveling

question

Teams

answer

workers placed in teams to solve problems and perform a variety of tasks

question

Problem-Solving

answer

problems addressed solved through consensus - rather than through complaint/grievance

question

Leveling

answer

factory workers and managers treated alike (everybody treated equally)

question

Just-In-Time Delivery

answer

-Shipment of parts and materials to arrive at a factory moments before they are needed - Especially important for delivery of inputs, such as parts and raw materials, to manufacturers of fabricated products, such as cars and computers - Reduces the amount of money a manufacturer must tie up in wasteful inventory - Some cases inventory burden put on suppliers

question

What are the two types of disruption that can occur in Just-In-Time Delivery?

answer

Labor unrest and "Acts of God"

question

Labor Unrest

answer

strike can shut down entire production

question

"Acts of God"

answer

weather-related incidents and non-weather events

question

United Kingdom

answer

Geographic Location: Northwest Europe Primary Resources:iron, coal, cotton, fabric Other Info: high tech industries -where industrial rev. originated -lowered taxes on business, reduced government regulations, and convergent monopolies to private ownership

question

Rhine-Ruhr Valley

answer

Geographic Location:Belgium, France, Netherlands Primary Resources: iron and steel manufacturing, machinery locomotives Other Info: contains Rhine and Ruhr rivers -Europe's most important industrial area

question

Mid-Rhine

answer

Geographic Location:Germany, France, Luxembourg Primary Resources: Frankfurt became hub of road, rail, and air networks in Germany -steel production Other Info: second most important industrial area -specialize in high value goods and skilled labor

question

Northern Italy

answer

Geographic Location:Po River Basin Primary Resources: textile manufacturing in 19th century -raw material processors and mechanical-parts assemblers Other Info: has workers for lower wages -inexpensive hydroelectricity

question

Cultural Industrial District

answer

Geographic Location:centered around Moscow Primary Resources:produces 1/4 of Russia's industrial output Other Info: products are high value relative to their bulk and need skilled labor

question

St. Petersburg Industrial District

answer

Geographic Location:second largest city in Eastern Europe Primary Resources:shipbuilding, food, textiles, and chemicals Other Info:located near Baltic Sea

question

Volga Industrial District

answer

Geographic Location:along Volga and Kama rivers Primary Resources:motor vehicle, oil retiring, chemicals, and leather/fur Other Info:grew rapidly during WWII

question

Ural Industrial District

answer

Geographic Location:Ural Mountain Range Primary Resources:contains 1000 types of minerals -chemicals and steel manufacturing Other Info: industrial develop hindered by lack of nearby energy sources

question

Kuzneisk Industrial District

answer

Geographic Location:east of Ural Mountains Primary Resources:coal and iron ore Other Info:Soviet planners took advantage of these to invest in constructing factories in the region

question

Eastern Ukraine

answer

Geographic Location: Donetsk, Krivoy Rog Primary Resources:world's largest coal reserves -iron ore, maganese, and natural gases Other Info:largest producer of pig iron and steel

question

New England

answer

Geographic Location:Northeast Europe Primary Resources:cotton, textiles -relatively skilled but expensive labor Other Info:oldest industrial area -cotton imported from South and finished cotton products shipped to Europe

question

Silesia

answer

Geographic Location:southern Poland and Northern Czech Republic Primary Resources: steel production Other Info:near coalfields -iron ore must be imported

question

Middle Atlantic

answer

Geographic Location:between New York City and Washington Primary Resources:financial, commercial, and entertainment -main port of NYC Other Info:largest U.S. market -industries depend on foreign markets -need proximity to many consumers

question

Mohawk Valley

answer

Geographic Location:upper NY along Hudson River and Erie Canal Primary Resources:steel, food processing, and electricity Other Info:aluminum, paper, and electronics -chemical industries

question

Western Great Lakes

answer

Geographic Location: Detroit, Toledo, Ohio on the east to Chicago and Milwaukee Primary Resources:transportation, machine tools, clothing, furniture Other Info:Chicago is transfer port among systems -automobile manufacturing

question

Canada

answer

Geographic Location:St. Lawrence Valley, Ontario Peninsula area Primary Resources: access to hydroelectric power -automobiles -steel in Ontario Other Info:proximity to Great Lakes -attracts aluminum, paper making, flour mills

question

Pittsburgh -Lake Erie

answer

Geographic Location:area between Pittsburgh and Cleveland Primary Resources:steel Other Info:nations most important steel area in 19th century -attracted other manufacturing -heavy use of steel

question

Japan

answer

Geographic Location:East of China, North of Taiwan, South of Russia Primary Resources:sold goods in large quantity, low prices Other Info:started training workers for highly skilled jobs -industrial power (1950s-60s)

question

China

answer

Geographic Location: clusters in eastern coastal portion of country Primary Resources: large urban areas, many people working Other Info:second largest manufacturer, labor force

AP Human Geography Chapter 11 Industry – Flashcards

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