Location of Manufacturing (College Board AP® Human Geography)
Study Guide
Written by: Kristin Tassin
Reviewed by: Bridgette Barrett
Factors Affecting the Location of Manufacturing
Labor, transportation, markets, and resources affect where manufacturing is located
Labor is the most important site factor globally
Transportation has been revolutionized by cargo ships, which carry raw materials and finished products all over the world, contributing to global trade and globalization
Production facilities tend to be closer to markets when transportation costs of the final product are high
Manufacturing facilities are located closer to resources when transportation costs of raw materials are high
Factors related to the costs of production which affect location include:
the cost of the land
Factories are built on the cheapest land available that is still accessible to transportation routes
Land is cheaper in suburbs and rural areas on the outskirts of urban areas
that owners want factories to be close to highways and ports
Other factors which affect the location of manufacturing include:
break of bulk points
Agglomeration
Break of bulk point
A break-of-bulk point is the location where goods are transferred from one mode of transportation to another
For example, ports are common break-of-bulk points where goods are transferred from cargo ships to trains or trucks
Worked Example
Singapore is a major break-of-bulk point in Southeast Asia. Which of the following statements correctly explains why the port of Singapore is a break-of-bulk point?
A. Mechanized systems used by the port result in fewer workers being required to unload container ships
B. The port can accommodate large container ships that can be unloaded quickly and transferred to different transportation modes, including rail and trucks
C. Warehouses at the port allow for goods to be stored
D. Goods can be transferred to other ships
E. Singapore is close to other major ports in Asia, such as Shanghai
Answer
The correct answer is B. The port of Singapore is a major break-of-bulk point because it serves a location where goods can be transferred from one mode of transportation to another. Here, goods are transferred from ships to rail and ground transport.
Examiner Tips and Tricks
As in the Worked Example above, beware of red herring answers. Red herrings are answer choices that distract from the correct response. In the example above, multiple answers are true. Mechanization does reduce the need for human labor, warehouses can be used to store goods, goods can be transferred to other ships, and Singapore is close to other major ports in Asia. However, none of those statements explain why it is a break-of-bulk point. Only selection B addresses the point of the prompt. Be sure to carefully read what each question or prompt is asking so that you do not get distracted by a red herring.
Agglomeration
Agglomeration refers to the clustering of similar economic activities, businesses, industries, and people in one area, leading to increased productivity and efficiency
Businesses benefit from agglomeration because they:
can draw from an experienced labor pool
share resources
use similar infrastructure
appeal to similar customers
There are many examples of agglomeration in the US, including:
tech companies primarily locating in Silicon Valley
the entertainment industry concentrating in Los Angeles
healthcare and research facilities are common near Raleigh, North Carolina
Least cost theory
Alfred Weber’s Least Cost Theory attempts to explain the factors which determine where manufacturing is located
According to this theory, the goal is to find a location where the cost of making goods is cheapest
The theory argues that owners attempt to minimize the costs of labor, transportation, and infrastructure in deciding where to locate their factories
Weber considers labor cost, transportation costs, and agglomeration to decrease costs and increase profits
Factories might be placed in one country over another country or in one state over another state based on cheaper labor, transportation and agglomeration opportunities
The prime focus of Weber’s theory is transportation requirements
An image showing Weber’s Least Cost Theory
The Least Cost Theory depends on the:
location of raw materials
location of the market
costs associated with transportation
Locations are either material-oriented (bulk-reducing) or market-oriented (bulk-gaining)
Material orientated factories
Factories are material-oriented when they are located nearer to the raw material than to the market
Material-oriented factories make bulk-reducing products
Bulk-reducing refers to something that loses volume or weight during production
To minimize transportation costs, factories are located closer to the supply of raw materials
For example, copper refineries are closer to copper mines and lumber factories are closer to forests than to the point of sale
Lumber becomes lighter and smaller as it is manufactured from trees into furniture or paper
Therefore, it costs less money to transport in its final form than in its raw form
To reduce overall transportation costs, factories are located closer to the raw materials
Market orientated factories
Factories are market-oriented when they are located nearer to the market than to the supply of raw materials
Market-oriented factories produce bulk-gaining products
Bulk-gaining refers to something that gains volume or weight during production
To minimize transportation costs, factories are located closer to markets
Automotive manufacturing is a bulk-gaining, market-oriented product
The product becomes bigger, larger, and heavier as it is produced
Smaller parts are combined to make cars, which are larger and heavier than their components
Therefore, car factories are located closer to the market so that transportation costs are reduced
Core, Semiperiphery, & Periphery
The location of manufacturing globally is influenced by a country’s level of economic development, costs of labor, and the global division of labor between:
core
semiperiphery
periphery
Manufacturing in core countries relies on:
advanced infrastructure
skilled labor
technological innovations
The types of goods produced in core countries tend to be more technological
Examples of manufacturing in core countries are:
automobiles
electronics
computer technology
Core countries outsource more labor-intensive manufacturing to the periphery and semiperiphery to reduce labor costs
Manufacturing in the semiperiphery is characterized by relatively lower labor costs than core countries, but higher skill levels and infrastructure development than peripheral countries
Examples of goods produced in the semiperiphery are:
textiles
appliances
automobiles
cheaper electronics
Manufacturing in the periphery focuses on labor-intensive, low-tech industries
Peripheral countries are used for cheap labor and production of raw materials by companies from core and semi-peripheral areas
Examples of manufacturing in the periphery are:
textiles
processing of raw materials, such as cocoa or palm oil
The core, periphery, and semiperiphery interact with one another in manufacturing, production, and consumption
Core countries focus on advanced manufacturing and outsource labor-intensive industries to semiperipheral and peripheral countries
The semiperiphery manufactures mid-range goods, produced mostly for consumption by core countries
The periphery manufactures basic products and processes raw materials, all for significantly lower wages than prevail in the core and semiperiphery
In this system, wealthier countries benefit disproportionately from the cheap labor and resources of the periphery, contributing to the continuation of global economic inequality
Image: Rendering of the relationship between core, semiperiphery, and periphery. Low wage labor and raw materials flow from the periphery to the core and value-added goods are sold by the core back to the periphery and semiperiphery
A map showing which countries comprise the core, semiperiphery and periphery
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