Manufacturing & Industrial Location Theory – Chapter 10

• Material Transformation• Urban→suburban• Employment source• Linkages

• Key decision• Investment in place• Fixity→Industrial inertia

• Clustering of industrial activity

• Corporate Behaviour• Recognition of future production capacity

needs• Options to meet future production capacity

needs• Adjustment in-situ• Acquisition• New plant expansion

• How and who decides? (Org. structure)• Site selection

Markets: Demand side factors in industrial location

• Market orientation• Final demand: Consumers• Intermediate demand: Industries• Transportation costs

• Higher for finished products• Lower for raw materials

− (But gross raw materials are weight-losing)

Market orientation

• Beverages• Perishables• Newspapers

(printing)

Market orientation

• Women’s apparel (garments)• High fashion• Mass production• Agglomeration

economies• Components

(e.g. auto parts)• Minimum cost location

is not always maximum profit location!

Production costs

• Factor substitution• Labour vs. capital vs. land• e.g. Cattle beef chain

• Ranching• Feed lots• Meat packing

• e.g. Plastic Moulds• e.g. Hair cuts

Labour costs

• Labour intensive, unskilledIndustrial processes

• Textiles• Clothing• Footwear

• Low labour cost locations• Urban → rural (or down urban hierarchy)• North → south (U.S.)• Core → periphery

• e.g. Novatel - JRC