Industrial Location and Global Division of Labor

Flashcards for Geography Lecture Review

What is a Bulk Gaining Industry?

An industry in which the weight of the final product is greater than the combined weight of the individual inputs. These industries tend to locate closer to the market to minimize transportation costs of the heavier final product. An example is the beverage industry, where water is added to concentrated syrup.

What is a Bulk Reducing Industry?

An industry in which the weight of the final product is less than the combined weight of the individual inputs. These industries often locate closer to the source of raw materials to reduce the cost of transporting bulky raw materials. An example is the copper industry, where ore is processed near the mine before being shipped to manufacturing centers.

What are Weber, Losch, and Hotelling Models?

These are location models that help businesses determine the optimal location for a factory by considering factors like transportation costs, market access, and competition:

• Weber's Model (Least Cost Theory): Focuses on minimizing transportation and labor costs.
• Losch's Model (Profit Maximization): Focuses on identifying locations where revenue will be maximized.
• Hotelling's Model (Locational Interdependence): Focuses on how competitors strategically locate relative to each other.

What are Site Factors?

These are the characteristics of a specific location that make it attractive for industrial development. The three primary site factors are:

• Land: The cost and availability of land.
• Labor: The availability of skilled and unskilled workers and their wage rates.
• Capital: The availability of financial resources for investment.

What are Situation Factors?

These factors involve the transportation of materials to and from a factory. The two main situation factors are:

• Proximity to Market: Locating close to customers to reduce distribution costs, especially for bulk-gaining industries.
• Availability of Transportation: Access to various modes of transport such as railways, highways, ports, and airports.

What is the Global/International Division of Labor?

This refers to the spatial division of labor where the production process is divided across different countries, with each country specializing in specific tasks. This often involves moving production to countries with lower labor costs or other comparative advantages. For example, a product might be designed in the United States, have its components manufactured in China, and be assembled in Mexico.

What are Outsourcing/Maquiladoras?

These terms describe the practice of contracting work out to external companies or individuals, often in other countries, to reduce costs or improve efficiency. Maquiladoras are specifically factories in Mexico run by a foreign company and exporting its products to the country of that company. For example, a U.S. company might outsource its customer service operations to India or establish a maquiladora plant in Mexico to assemble electronic components.