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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.

Typology: Summaries

2021/2022

Uploaded on 09/12/2022

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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.
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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