ALFRED WEBERS
LEAST THEORY OF
INDUSTRIAL LOCATION
(For B.A/ [Link] Part -I Hons.)
MADHUSUDAN
PRAMANICK
Assistant Professor
Department of Geography
madhusudan94333@[Link]
Mob. 0-9433402382
(18681958)
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.
Webers least cost theory accounted
for the location of a manufacturing plant
in terms of the owners desire to
minimize three categories of cost:
Transportation,
Labour
and
Webers 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) Ubiquitouswater 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.
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
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 materialIndustry 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 materialat 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-
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 Isards work on US Steel Industry
and Smiths works on weight- losing in
Britain have, however, shown the validity of
many webers conclusion
THANK YOU
