Ch.

11 Industry and Energy

Key Issue 2: Why Are Situation and Site Factors Important?
Rubenstein, p.388-399

1. *Big Theme of chapter* When companies are deciding where to locate a factory, they consider two geographic
costs:

a. ___________site factors______________________ which include: labor, capital and land

b. __________________land situation________________ which include: Proximity to inputs and Proximity to

markets

I. SITUATION FACTORS: PROXIMITY TO INPUTS

2. When/why would a company locate its factory closer to inputs? Closer to markets?

Close to inputs- Near resources, cheaper labor.

Closer to markets-Near places to sell, high transportation costs.

3. Notice that there are few mineral resources in ______ Europe, Central Asia, and Southwest Asia & North Africa.
4.
5. Define and give examples of bulk-reducing industry:

Original product weighs more compared to the finished product.

II. SITUATION FACTORS: PROXIMITY TO MARKETS

6. Define and give examples of bulk-gaining industry:

The initial product weighs more then the end product.

7. Define and give examples of single-market manufacturers:

Specialized manufacturers with only one or two costumers.

8. Give examples of perishable-product companies:

Milk, fruits, vegetables

9. Regarding vehicle production, vehicles are produced __________sold____________________________,

 but the nationality of the manufacturer is less likely to be ________local_______________.

III. CHANGING SITUATION FACTORS: STEEL

10. How has steel production shifted from 1980 to 2013?

The share of world steel production declined 27 percent in developed countries and 73 percent in developing countries

IV. TRUCK, TRAIN, SHIP, OR PLANE?

11. Define break-of-bulk point:

location where transfer among transportation modes is possible

12. What is containerization?

the transfer of packages between modes of transportation.

13. Explain the concept/practice of just-in-time delivery and give some examples.

Shipped before the products are needed.

V. SITE FACTORS IN INDUSTRY

14. Site factors relate to _________cost of factors__________ costs and include the following 3 factors:

15. Worldwide, ____half a billion_____ people are involved in industry. Identify their distribution:
Most are in india, china, and in developing countries

16. a. Define labor-intensive industry:

An industry in which wages and other compensation paid to employees constitute a high percentage of
expenses .

b. In the U.S. labor costs count for approximately ___11_% of overall manufacturing costs, so labor-intensive
industry…
 c. An industry with significantly lower than average labor cost is ______capital__united
states______inensive_____________.

17. Wages paid to manufacturing workers:

$35 dollars in developed countries, $2 China

18. Is the motor vehicle industry labor intensive? (Explain.)

No because you are only doing one job.

19. a. Define capital:

Money owned by a person or company

b. Explain the connection between capital and the distribution of industries. Give examples.

Large supply of labor, Capital sources, and close to market.

20. What are three reasons cities are attractive locations for factories?

Large supply of labor, Capital sources, and close to market.

21. How does a factory’s location impact its physical structure?

If a factory is in a city, the factory will have multiple stories, with elevators and pulleys to transport materials up or
down the building. If the factory is built in a rural area then the factory will be most likely one floor and have mark
conveyor belts or forklifts.

22. Identify key contemporary factory location factors.

One story buildings, delivered at one end, moved through the building with forklifts and other modes of transportation
VI. CHANGING SITE FACTORS: CLOTHING

23. Define textiles:

Woven Fabrics

24. What type of laborers are required in the textile industry?

Low skill labor

25. Is the textile industry labor or capital intensive?

Labor intensive

26. Despite high transportation costs, _______china_________ and _______india_________ have become the
dominant fabric producers because
of the severely low labor costs
27. Interpret Figure 11-30.