Summary of Weber Model of least cost location

1. WEBER MODEL OF
INDUSTRIAL LOCATION
• Model used to predict the location of
an industry.
Keniesha Brown

2. Assumptions
Numerous, competitive, single-plant firms
Transportation costs: a linear function of
distance
 Producers (firms) face no risk or uncertainty
 Infinite demand for a product at a given price
 Identical production technology everywhere
(i.e., uniform per unit production costs)

3. ASSUMPTIONS
• Raw material were not evenly
distributed.
• Ubiquitous Raw materials-those found
everywhere
• Localised Raw Material-gross and pure

4. WEBER LEAST COST
LOCATION THEORY
Weber produced two types of locational
diagrams:
1. A straight line to show examples where one
raw material is localised (pure or gross).
2. A locational triangle to show when two
localised raw materials were involved.

5. STRAIGHT LINE DIAGRAM
One ubiquitous and one
pure RM
U
U
M
LRM
(pure)
U Ubiquitous raw material
LR LRM
M (pure)
Least-cost
location
M Market

6. STRAIGHT LINE DIAGRAM
One ubiquitous and one gross RM
U
U
U
M
LRM U
(gross)
U Ubiquitous raw material
LR LRM
M (pure)
Least-cost
location
M Market

7. LRM
(pure) Localised Raw
Material
Least-cost location
M (pure)
M Market
One pure
RM, one M
gross RM
LCL will move
towards the source
of the gross
LRM
material if there is a
(gross)
heavy weight loss

8. Two Gross RMs
LR LRM
M (pure)
LRM
(gross) Least-cost
location
M Market
M
LRM

9. Solutions to Weber’s
Location Problems

10. FACTORS AFFECTING
PRODUCTION COSTS
• Cost of Raw Material
• Cost of transportation
• Cost of labor
• Agglomeration/deglomeration economies of
scale

11. ISOTIMS AND ISODAPANES
• Since transportation costs were the most
important factor affecting production, weber
produced a map which would be able to
determine the least cost location (LCL)

12. ISOTIMS

13. Isotims and Isodapanes
2 sets of
isotim $30
assembly $25
cost
+ $20
distribution
cost

Total transport
cost
Isodapane

14. Alfred Weber, 1909
Labour costs: Isotims
 Labour costs as
“distortion” to basic
transport costs pattern
 Isotim
 Line of equal transport
cost for any
material, RM or FP
 “X” has cost of $3.

15. Case 7: Two Weight-losing raw materials
Isocost lines: concentric rings that connect equal-cost points (isotims) around RM1, RM2
and MKT
Weber called the isocost lines corresponding to each point location isotims

16. ISODAPANES
 We can find total transport cost for as many
points as we want. And we can connect all the
equal cost or equal value total transport cost
points to produce what Weber termed
isodapanes. In three dimensions, the graph
of isodapanes would look like a bowl or
depression in the space-cost surface. In two
dimensions, it looks like a U. Clearly, the
optimal location is in the trough of the
depression.

17. Total transportation costs (TTC) are simply the sum of isotims at any
point on the graph
E.g., At X, TTC = 3 + 2 + 2 = 7

18. Alfred Weber, 1909
Labour costs - Isodapanes
 Isodapane
 Line of total transport costs
 Determined by summing the value of all isotims at a point
 And joining all points of equal total transport costs

21. AGGLOMERATION
Industrial location may be swayed by agglomeration
economies. The savings which would be made
if, say, three firms were to locate together, are calculated
for each plant. The isodapane with that value is drawn
around the three least-cost locations. If these
isodapanes overlap, it would be profitable for all three to
locate together in the area of overlap.

22. Alfred Weber, 1909
Overlapping critical isodapanes
 Agglomeration
economies

23. Stage 2 - add in Agglomeration
Economies