Transcript alfred weber`s least theory of industrial location

ALFRED WEBER’S LEAST
THEORY OF INDUSTRIAL
LOCATION
(For B.A/ B.sc Part -I Hons.)
MADHUSUDAN PRAMANICK
Assistant Professor
Department of Geography
[email protected]
Mob. 0-9433402382
(1868-1958)
LEAST COST THEORY
Alfred Weber (1868-1958) formulated a
theory of industrial location in which an
industry is located where it can minimize its
costs, and therefore maximize its profits.
Weber’s least cost theory accounted for
the location of a manufacturing plant in terms
of the owner’s desire to minimize three
categories of cost: Transportation, Labour and
Agglomeration
Weber’s Assumptions
A country or region is homogeneous in terms of
culture,
climate, topography, race of people,
technical skills of the people and political system.
Raw materials are two types: i) Ubiquitous-water
air, sunshine etc. and ii) Localized- iron ore, coal
etc. a) Pure raw material b) Impure raw material.
There are fixed locations of labour where wage
rates are fixed and labor is immobile and unlimited.
Transport cost is directly proportional to the weight
and distance travelled.
Product of goods in a market is unlimited demand
and perfect competition exists.
POSTULATIONS
The Factors that control the location of
industries are as under:
I) Role of Transport Cost,
II) Role of Labour Cost and
III) Role of Agglomeration of Industries.
Role of Transport Cost
Transport Cost depends on- a) Assembly cost and b)
Marketing Cost.
Based on transport cost least cost depends on
Material Index(MI),
MI=[ Weight of Raw Material/ Weight of Product]
MI= >1, Raw oriented location,
MI= <1 Market oriented location and
MI= 1 Industry may be located either at the source of
raw material or at the market place depends on
nature of raw material and distance.
ISOTIM:Lines
joining
points of equal transport
costs of commodity.
ISODAPANE:
Lines
joining points of equal
total transport cost
Condition: 1 One raw material and one market,
Ubiquitous raw material- at the market center.
Localized and pure raw material- Industry may
be located either at the source of raw material or
at the market place.
Impure or Weight raw material – At the source
of raw material.
Condition: 2 Two raw materials and one market,
A) Two Ubiquitous Raw material - at the market center.
B) Two Ubiquitous Raw material( One localized and
another pure raw material- at the market center.
C) One ubiquitous raw materials and another impure –
At the source of weight losing raw material.
D) One impure and another pure raw material -At the
source of weight losing raw material.
E) Two pure raw materials- at the market center.
F) Two impure and localized raw materials- This
condition should be analyzed by locational triangle .
A complex situation may arise if both the
required raw materials are localized impure or
weight-losing the raw materials and market are
at an equilateral triangle (suppose 100 in each
direction) . Suppose to produced 1000 tonnes
finished product, the required raw materials
from each source is 2000 tonnes, and rate of
transport cost is Re. 1 per tonne per kilometre ,
the cost structure of the four possible locations
will be as under:
If the industry is to be located at R1, the total
transport cost will be :[(2000 tonnes× 100 Km × Re
1)+ (2000 tonnes× 100 Km × Re 1)]=Rs.40000
If the industry is to be located at R2, the total
transport cost will be :[(2000 tonnes× 100 Km × Re
1)+ (2000 tonnes× 100 Km × Re 1)]=Rs.40000
If the industry is to be located at M, the total
transport cost will be :[(2000 tonnes× 100 Km × Re
1)+(2000 tonnes× 100 Km × Re 1)]=Rs.40000.
If the industry is to be located at
P, the total transport cost will be :
[(2000 tonnes× 50 Km × Re
1)+(2000 tonnes× 50 Km × Re 1)
[(2000 tonnes× 86.6 Km × Re
1]=Rs. 3,73,200.
ROLE OF LABOUR COST
It is describe with the help of given mathematical
analysis. These are:
Index of labour cost: It is the average cost of
labour needed to produced one unit weight of
output.
Labour Co-efficient: It is the ration between cost per
unit of product to the total weight of raw material
and product to be moved.
Critical Isodapane: Weber
terms the isodapane which has
the same value as the saving in
labour cost the critical isodapane.
ROLE OF AGGLOMERATION OF INDUSTRIES
It is clear that
agglomeration of
could reduced their
total cost by
locating in the
shaded of critical
isodapane, industry
must locate of that
site.
CRITICISMS
Transport cost s do not rise proportionally with
distance and weight
Perfect competition of market rarely exists.
Weber ignored the spaced problem, high cost of
land and high rent in the industrial area.
Historical factors do not have been considered in
the location of industry.
Impact of price fluctuation does not consider.
Break of bulk point do not has been considered.
Homogeneous areas have been questioned.
CONCLUSION
The theory is important because of its pioneering
nature and its effects on later researchers .The
real test of theory is that it should accord with
reality, and empirical studies as Isard’s work on
US Steel Industry and Smith’s works on weightlosing in Britain have, however, shown the validity
of many weber’s conclusion