Chapter 11 key issue 3
Briana Thomas- AP Hug p.4
In this issue, we learn about the importance of the many ways geographers prove why one location may be more profitable for a factory then others. Usually a company will face these two geographical costs: situation and site.
The two main factors we will be covering are Situation and Site factors::
What are Situation Factors?
Situation factors mainly revolve around transportation of goods to and from a factory. The ideal location sought by companies is a place that minimizes the cost of transporting the materials. The farther something is transported the more cost there is. To obtain this low price, manufacturers try to place the factory as close to the customers as well as the sellers.
Location near inputs: A lot of major industries use inputs. Inputs can be anywhere from minerals to parts made by other producers. If the bulk of this input, plays a big part in a certain company they will try to minimize transportation cost by placing the firm near the input.
Location near markets: A favorable location for firms are close to the stores that will sell there products. There are three main industries related to transporting goods to sellers and consumers. Bulk- gaining industries, Single - market manufacturers and perishable products.
Ways of transportation:
There are four major ways of transportation for products:
However as the firm looks for the least expensive form of transportation, they all vary in prices according to their destinations. Air is usually the most expensive way, for all distances a good choice would be by ship and for shorter distances, vehicles such as trucks etc.
What are Site Factors?
Site factors are the unique characteristics of a location. The main production factors varying within locations are : Land, Labor and Capital
LAND: Land is a very important characteristic of a location generally because new factories require large areas of land. This type of land is usually more commonly found in the suburban or rural areas, and it is also cheaper than land near cities. Industries also will look for land with a good energy resource. Examples: Electricity, Aluminum/ coal industries.
LABOR: Some companies require a labor- intensive industry with highly skilled workers and others, less- skilled and inexpensive. The most notable example of a labor- intensive industry that we see all around the world that usually requires less skilled and low-cost are the Textile and Clothing industries.
CAPITAL: A lot of manufacturers will revieve or borrow funds to benefit their companies, this is a very important factor because the ability to borrow money or having a good source of money is crucial because many lower developed countries are short on funds. Having a strong economic support system from local/national gov with grants, loans and etc is essential for a developing industry.