Geography Reference
In-Depth Information
Economic activities vary, of course, and as a result, so do the factors that are most appropriate in de-
ciding where a particular economic activity may best be located. Thus, what is important with respect
to deciding where to build cars may be totally different than the location keys to growing mushrooms
or merchandising children's clothing. Also, in the case of some economic activities, a single location
factor may be all-important, while in another, a mix of several determinants may need to be con-
sidered.
Obviously, a good business location may be the key ingredient to profitability or overall success. Ac-
cordingly, nowadays two of the most important functions of economic geography are to help enter-
prises identify the location factors that are best for their particular business, and to sift through the list
of possible locations and choose a favorable site. The following sections offer a discussion of some
of the more important location factors.
Proximity to raw material(s)
Proximity to raw materials may be a critical location factor for economic activities that involve man-
ufacturing or processing. Both functions typically require delivery of raw materials from source areas
to the place of business. The cost of transporting raw materials to where they are needed may be a
major business expense, however. Thus, locating as closely as possible to the source or sources of
those materials is a good idea to minimize production costs, as well as producing a cost-competitive
final product. Following are three examples:
Cheese: Cheese production consumes large quantities of milk, which is expensive to trans-
port long distances because it can be bulky and requires refrigeration. Therefore, if you want
to make it in the cheese business, you'd be wise to locate as close as possible to a bunch of
dairy farmers. It comes as no surprise, therefore, that Wisconsin, a major dairy state, also leads
the country in cheese production.
Steel: The traditional blast furnace way of making steel requires lots of iron ore and lots of
coal, but not in just any amount. Generally, production of 1 ton of steel requires about 1.5 to
2.0 tons of iron ore and 2 to 3 tons of coal. Both ingredients are very bulky and expensive to
transport from mine to factory. But because more coal than iron ore is required, an old adage
is adhered to that goes, “Steel follows coal” — meaning that steel plants tend to locate closer
to coal fields than to iron ore mines in order to hold down transportation costs. Figure 15-5, a
map of the traditional American “Manufacturing Belt” in relation to coal and iron, very clearly
shows the relationship between steel and coal.
Hogs: If you want to seek your fortune in pork or bacon, then you should locate your hog
operation as close to corn country as possible. That is because corn is the principal ingredient
in pig feed, which is something you are going to need by the ton. Like many domesticated an-
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