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Difficulty: HardManufacturing Industries and Location Factors

A manufacturing plant utilizes 400 tonnes400\text{ tonnes} of localized raw material and 100 tonnes100\text{ tonnes} of ubiquitous raw material (such as water) to manufacture 100 tonnes100\text{ tonnes} of a finished product. Based on Alfred Weber's Least Cost Theory of Industrial Location, what is the Material Index (MIMI) of this production process, and where is the optimal site for locating this factory to minimize total transportation costs?

  1. Material Index is 4.04.0; the factory should be located at the raw material site.Answer
  2. B
    Material Index is 4.04.0; the factory should be located at the market.
  3. C
    Material Index is 5.05.0; the factory should be located at the raw material site.
  4. D
    Material Index is 0.250.25; the factory should be located at the market.

Answer

The Material Index is 4.04.0, indicating a weight-losing manufacturing process that should be located at the raw material site to minimize total transport cost.
Under Alfred Weber's Least Cost Theory, the Material Index (MIMI) is defined as the ratio of localized raw material weight to finished product weight: MI=400100=4.0MI = \frac{400}{100} = 4.0. Ubiquitous inputs (like water) are excluded because they are universally accessible. Because MI>1.0MI > 1.0, substantial weight is lost during production, creating a material-oriented industry that minimizes transport expenses by locating adjacent to the raw material extraction site.

Step-by-Step Solution

1
Identify the weights of localized raw materials, ubiquitous materials, and finished products.
Localized raw material weight = 400 tonnes400\text{ tonnes}; Ubiquitous raw material weight = 100 tonnes100\text{ tonnes}; Finished product weight = 100 tonnes100\text{ tonnes}.
Alfred Weber's Material Index considers only localized raw materials because ubiquitous materials are available everywhere at zero transport cost differential.
2
Calculate Weber's Material Index (MIMI) using the formula MI=Weight of Localized Raw MaterialWeight of Finished ProductMI = \frac{\text{Weight of Localized Raw Material}}{\text{Weight of Finished Product}}.
MI=400 tonnes100 tonnes=4.0MI = \frac{400\text{ tonnes}}{100\text{ tonnes}} = 4.0.
This formula measures the degree of weight loss or weight gain during the manufacturing process.
3
Apply Weber's location decision rule based on the calculated MIMI.
Since MI=4.0>1.0MI = 4.0 > 1.0, the industry is weight-losing (gross material).
Transporting 400 tonnes400\text{ tonnes} of raw material to market costs substantially more than transporting 100 tonnes100\text{ tonnes} of finished product, making the raw material source the least-cost location.

Key Concept

Weber's Material Index and Industrial Location Principle
Estimated Time:2m 0s
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Topics

Manufacturing Industries and Location Factors

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