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The Paris Basin is the Industrial base of France. Rouen (above) is at the head of navigation point on the Seine River.
Location Theory
Location Theory predicting where a business will or should be located. Location of an industry is dependent on economic, political, cultural features as well as whim. Location Theory Considers:
Variable costs-energy, transportation costs & labor costs Friction of distance-increasing distance =increased time & cost
Location Models
Webers Model-The Least Cost Theory
Alfred Weber, (1868-1958) a German economists, published Theory of the Location of Industries in 1909. His theory was the industrial equivalent of the Von Thunen Model. Manufacturing plants will locate where costs are the least. Categories of Costs: Transportation-the most important cost-usually the best site is where cost to transport raw material and finished product is the lowest Labor-high labor costs reduce profit-location where there is a supply of cheap, non-union labor may offset transportation costs
Agglomeration-when a group of industries cluster for mutual benefitshared services, facilities, etc.-costs can be lower
Deglomeration-when excessive agglomeration offsets advantageeastern crowded cities
Booming Town
Bunny Fur
Bricks
Webers Least Cost Theory: Brick Bunny Bulk Gaining Vs. Bulk Reducing.
Location Models
Hotellings Model-Harold Hotelling (1895-1973) this economist modified Webers theory by saying the location of an industry cannot be understood with out reference to other similar industries-called Locational Interdependence Loschs Model-August Losch said that manufacturing plants choose locations where they can maximize profit. Theory: Zone of Profitability
Time-Space Compression
Just-in-time delivery
rather than keeping a large inventory of components or products, companies keep just what they need for short-term production and new parts are shipped quickly when needed.
Modern Production
Outsourcing
moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings.
Offshore
Outsourced work that is located outside of the country.
Nike (A Light Industry)-Headquartered in Beaverton, Oregon, Nike has never produced a shoe in Oregon. Beginning in the 1960s, Nike contracted with an Asian firm to produce its shoes.
Skopje, Macedonia-The swoosh is ubiquitous, but where is the shoe produced? Nike has a global network of international manufacturing and sales.
Europe-despite North Sea Oil-still must import Mexico & Canada oil and natural gas U.S. uses 27% if oil & 37% of natural gas produced in the world. Dependent on imported oil OPEC: Saudi Arabia, Kuwait, Iraq, Russia large oil reserves
Deindustrialization
a process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment.
Abandoned street in Liverpool, England, where the population has decreased by onethird since deindustrialization
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