L4: Weber’s Least Cost
Theory
Big Idea: Alfred Weber’s model of industrial location emphasized the
owner’s desire to minimize transportation and labor costs and maximize
agglomeration economies.
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Alfred Weber's Theory: Optimal Location for Potato Chip Factory, Summaries of Cost Management
Alfred Weber's Least Cost Theory is a model of industrial location that emphasizes the owner's desire to minimize transportation and labor costs and maximize agglomeration economies. In this document, we explore the key concepts of Weber's theory and how they apply to the decision of determining the location for a new potato chip factory. Consider important terms such as site and situation, and learn about the assumptions and main factors of Weber's theory, including transportation, labor, and agglomeration.
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L4: Weber’s Least Cost
Theory
Big Idea: Alfred Weber’s model of industrial location emphasized the
owner’s desire to minimize transportation and labor costs and maximize
agglomeration economies.
Warm-up
You are responsible for
determining the location on a
new potato chip factory.
What should you consider
when determining where it
should go?
Von Thünen liked circles...Weber liked triangles
Von Thünen Model of Agricultural Land Use (1826)
Alfred Weber’s Theory of Industrial Location (1909) Market
Raw Materials
Raw Materials
Production
What is the most profitable place for a manufacturing plant?
Alfred Weber