Least Cost Theory . Alfred Weber's model – owners of manufacturing plants seek to minimize three costs: 1) Transportation, and; 2) labor. The least cost theory looks at the three common categories of cost that typically have the largest influence on profits. 1. Transportation. Weber suggests that. Read this essay to learn about the Least Cost Location Theory of Alfred Weber. After reading this essay you will learn about: 1. Objectives of the Theory 2.


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weber s least cost theory Why Many Industries Fail to Maximize Products One of the key issues that is addressed in the least cost theory by Weber is the idea of weight gain. After receiving raw materials at their location, they produce a product for the marketplace that is larger than the raw materials they received.

For the modern industry, there may be multiple weight-gaining issues that must be addressed for a single product that goes to market.

Take a bottle of Dr Pepper as an example.

Essay on the Least Cost Location Theory of Alfred Weber | Industries

That liquid cannot be served to the general public after it has been created. It must be placed in containers that make the liquid accessible to others so it can be consumed.

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That means cans, bottles, and pressurized containers. The plastics and metals add weight to the product that is shipped to the market. It was formulated by the famous French mathematician Pierre de Fermat before As for the Weber triangle problem, which is a generalization of the Fermat triangle problem, it was first formulated by Thomas Simpson inand popularized by Alfred Weber in In its simplest version, the attraction-repulsion problem consists in locating a point D with respect to three points A1, A2 and R in such a way that the attractive forces exerted by points A1 and A2, and the repulsive force exerted by point R cancel each other weber s least cost theory.

In the same book, Tellier solved that problem for the first time in the triangle case, and he reinterpreted spatial economics theory, especially, the theory of land rentin the light of the concepts of attractive and repulsive forces stemming from the attraction-repulsion problem.

That problem was later further analyzed by mathematicians like Chen, Hansen, Jaumard and Tuy[3] and Jalal and Krarup The clustering and linkages allow individual firms to enjoy both internal and external economies.

Alfred Weber

Auxiliary industries, specialized machines or services used only occasionally by larger firms, tend to be located in agglomeration areas, not just to lower costs but to serve the bigger populations. Firms who can achieve economies by increasing their scale of industrial activities benefit from agglomeration.

However, after reaching an optimal size, local facilities may become over-taxed, weber s least cost theory to an offset of initial advantages and increase in PC.

Then the force of agglomeration may eventually be replaced by other forces which promote deglomeration. Globalization[ edit ] Similarly, industrial activity is considered a secondary economic activity, and is also discussed as manufacturing.

Industrial activity can be weber s least cost theory down further to include the following activities: Today with multinational corporations, the three activities listed above may occur outside MDCs.

Alfred Weber’s Basic Industrial Location Model

Weber's theory can explain some of the causes for current movement, yet such discussion did not come from Weber himself.

Weber found industrial activity the least expensive to produce. Least cost location then implies marketing the product at the least cost to the consumer, much like retailers attempt to obtain large market shares today. Economically, it is explained as one way to make a profit; creating the cheapest product for the consumer market leads to greater volume of sales and hence, greater profits.

The location of raw materials is a given fixed in space weber s least cost theory a predetermined weber s least cost theory known fashion.

The spatial distribution of consumption is a given, and there is only one central purchase point for each producing unit; of course, he understood that in the real world, the location of a plant influences the distribution of labor and, in turn, this distribution impacts upon consumption.

Alfred Weber Least Cost Theory Explained

The distribution of labor is fixed, as are wages at any specific location. Material Index is the ratio of raw materials and finished product. When the Material Index M.