Manufacturing & Industrial Location Theory – Chapter 10 Material Transformation Urban→suburban Employment source Linkages Key decision Investment in place Fixity→Industrial inertia Clustering of industrial activity

Corporate Behaviour Recognition of future production capacity needs Options to meet future production capacity needs Adjustment in-situ Acquisition New plant expansion How and who decides? (Org. structure) Site selection

Markets: Demand side factors in industrial location Market orientation Final demand: Consumers Intermediate demand: Industries Transportation costs Higher for finished products Lower for raw materials − (But gross raw materials are weight-losing)

Market orientation Beverages Perishables Newspapers (printing)

Market orientation Women’s apparel (garments) High fashion Mass production Agglomeration economies Components (e.g. auto parts) Minimum cost location is not always maximum profit location!

Production costs Factor substitution Labour vs. capital vs. land e.g. Cattle beef chain Ranching Feed lots Meat packing e.g. Plastic Moulds e.g. Hair cuts

Labour costs Labour intensive, unskilled Industrial processes Textiles Clothing Footwear Low labour cost locations Urban → rural (or down urban hierarchy) North → south (U.S.) Core → periphery e.g. Novatel - JRC