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Critically examine the value of classical location theory (Weber) when applied to modern manufacturing industry.

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Introduction

Critically examine the value of classical location theory (Weber) when applied to modern manufacturing industry. A model is a simplified structure of reality. Models generally concentrate on a limited number of factors to explain a distribution, feature or process. In 1909, Alfred Weber put forward his theory of classical location in which he tried to explain the location of industries. He predicted that industrialists would locate their factory at the least cost location, in the cheapest area, since they acted rationally and that their main aim was the maximisation of profits. He began with some assumptions of an ideal type of industry as a unit of analysis. He tested the model under the assumption that production and distribution are indivisible and independent of other industries. ...read more.

Middle

However, it was understood that the optimum location may shift if savings from labour costs or agglomeration outweigh the increased transport costs of moving. In fact, more specifically, changes in location factors can lead to three areas of change within an industry, according to Weber. These are either a spatial or vertical splitting of production and distribution, a diversification within the plant of various processes or the division of labour between industries. Location may affect the costs of an industry in securing a location, for example, the cost of real estate and obtaining raw and auxiliary materials. General regional factors may also affect the costs of manufacturing, for example, the labour costs and transport costs involved when shipping products to their consumers. ...read more.

Conclusion

Firstly, they simply believe that industrialists are not exactly rational, secondly, that there can be only be one least cost location although many of the other profitable locations are still seized on, especially by many industrial rivals, and thirdly, it is believed that Weber over-emphasised the importance of transport costs. The issue of industrial location is increasingly relevant to today's global markets and multi-national corporations. Focusing only on the mechanics of the Weber model however could justify greater transport distances for cheap labour and those unexploited raw materials. When resources are exhausting and worker's protest, industries might see fit to move to different countries. As a sociologist who resisted the ideology of the Fascist movement he was part of for a good portion of his life, Alfred Weber might today have expanded his discussion of the potential negative social, cultural and historical consequences of the underlying issue of industrial location. ?? ?? ?? ?? William Cooper ...read more.

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