9.02 Industrial Location - Weber Model

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by Gabrielle Michael0 views·Updated Mar 12, 2021
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  1. Yeah, The prompt for this situation is suppose that you
  2. have been hired from a strategic planning firm to advise
  3. a client about the best location for a soft drink
  4. bottling plant in Weber County.
  5. You will need to consider several factors in making your
  6. recommendation. Several other people are also making recommendations to the
  7. planning firm, so you will need to persuade the firm
  8. that your recommendation is the best one.
  9. In order to make an informed decision about where to
  10. locate the soft drink bottling plant, we must first look
  11. at the weather model more in depth.
  12. First, there are five assumptions about the Weber model.
  13. Homogeneous characteristics, a single product and market raw materials for
  14. multiple sources, infinite labor resources and transportation costs.
  15. In addition, another important factor relating to Weber's model is
  16. the least cost theory.
  17. This theory was developed from Weber's research states that the
  18. best location for an industry is the location at which
  19. the costs of transportation, labor, land and resources are most
  20. favorable. In other words, a company will choose a location
  21. that helps it minimize costs while maximizing profits as shown
  22. in the image.
  23. The least cost theory states that there is a sweet
  24. spot, which is a location that is the most profitable
  25. for a company to be located at.
  26. We want to place the industry in a strategic location
  27. that will make them the most money and make our
  28. recommendation the best one for the soft drink bottling plant.
  29. Another major cost factor the Weber discussed was related to
  30. what he termed agglomeration.
  31. This defined the clustering of many businesses together in the
  32. same area in order to draw on shared skills and
  33. resources. A collaboration helps businesses save money and to be
  34. more cost effective because by grouping together manufacturers and suppliers
  35. of various resources, the industries can transport these resources more
  36. quickly and easily and also have access to a large
  37. labor pool.
  38. Thus, when deciding where to locate the soft drink industry
  39. is important to look for other related industries to see
  40. if locating our industry nearby would help save money.
  41. Yeah, Finally, the last few factors to consider include distance
  42. decay and friction of distance.
  43. Friction of distance refers to the additional time, effort and
  44. money required to interact with markets and businesses over greater
  45. distances. Compared to those located nearby.
  46. Distance decay is the idea really a diffraction of distance
  47. that states that the effects of an industrial activity have
  48. less of an impact as the distance from the activity
  49. and other markets and businesses increase.
  50. Ultimately when relating to the prompt.
  51. This means that the soft drink industry should be located
  52. as close to markets and consumers as possible.
  53. The next step is to apply the characteristics of the
  54. weather model to the soft drink bottling industry situation.
  55. The goal is to use the characteristics of this locational
  56. theory to select the best possible location for the factory.
  57. Based on numerous factors in selecting the location, the first
  58. factor to consider is transportation.
  59. Whoever believed that the most important costs influencing industrial location
  60. were those associated with transportation.
  61. As part of the secondary economic sector, the soft drink
  62. industry transforms the raw materials extracted as part of the
  63. primary economic sector into goods sold through tertiary economic activities.
  64. Because of these connections, the best factory location offers low
  65. transportation costs, both for the movement of raw materials, from
  66. the point of extraction and for the movement of finished
  67. goods to markets where they can be sold to consumers.
  68. Thus, we should choose a location for the factory that
  69. is near a major highway that has access to resources
  70. needed for production and that also has easy and quick
  71. transportation to markets.
  72. This will help minimize transportation costs and make for a
  73. more successful company.
  74. Two markets are also important to keep in mind when
  75. selecting a location in the soft drink bottling industry, weight
  76. and bulk has gained during the manufacturing process.
  77. Thus, it would be beneficial for the industry to be
  78. located fairly close to markets in order to minimize transportation
  79. costs summarily.
  80. According to Weber's theory, it is more advantageous for these
  81. types of manufacturers to be located close to their markets
  82. to minimize the costs associated with transporting their larger, bulkier
  83. finished goods than it is for them to be located
  84. near the source of the lighter, easier to handle inputs
  85. such as special syrups and water.
  86. Next is proximity to suppliers.
  87. Though being located near markets is important, being located near
  88. suppliers of resources is also crucial factor to consider.
  89. In this case, it is also very important to be
  90. located near the water supplier because water is a costly
  91. input to transport.
  92. On the other hand, special syrups would be easier and
  93. less costly to transport, and as a result, the soft
  94. drink industry could be located farther from the syrups and
  95. closer to the water, the final factor to consider our
  96. natural resources involved in the industry.
  97. The natural resource that is important to this prompt is
  98. the water in the Alfred River.
  99. Thus, it is important that the soft drink plant should
  100. be located near the water and river of the Weber
  101. County Water Treatment Plant to help reduce costs and bottling
  102. the beverages.
  103. This clustering of industries together to share resources, decreased costs
  104. of production and create economies of scale is an example
  105. of a glam aeration, a valuable takeaway from Weber's model
  106. and a good factor to consider in choosing the location
  107. for the soft drink industry.
  108. Mhm. After taking all of these factors into consideration and
  109. looking at the map, the best location for the soft
  110. drink bottling plant is along highway be near the Weber
  111. County Water Treatment Plant, Route E and Maple Street.
  112. See the Yellow Star?
  113. Okay, The location on highway being your Maple Street and
  114. Rowdy is the best location because it follows Weber's least
  115. cost theory thoughts on agglomeration and principles of friction of
  116. distance. Specifically, the water treatment plant is nearby.
  117. There's this Europe supplier within easy access, and there are
  118. vending machine delivery routes immediately by this location.
  119. In addition, this location has numerous transportation routes to reach
  120. the markets in the fastest way possible.
  121. Thus, this is the best, most cost effective location.
  122. That is the sweet spot between resources and markets, with
  123. ample transportation between both.