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Models of Industrial location by Losch.
Transcript of Models of Industrial location by Losch.
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Savitribai Phule Pune University – 411007.DEPARETMENT OF GEOGRAPHY.
“MODELS OF INDUSTRIAL LOCATIONS – LOSCH”.
* Shalaka Kshatriya * Om Solunke *
* Shwetali Deshmukh *
Presented By
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Content Introduction.
Industrial Regionalization.
Influencing Factors.
Introduction of Losch.
Losch Theory and It’s Model.
Criticism. Model of Industrial Location :
Losch.
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Introduction• Why Industries are located in some particular
region within a state or a country? or whether they are.
• why world’s distribution of industries are very uneven?
• Why No one is trying to start new industry/ company in different part?
Model of Industrial Location : Losch.
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World‘s Major Industrial Regions.
Model of Industrial Location : Losch.
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Industrial Regions of USA.
Model of Industrial Location : Losch.
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India’s Major Industrial Regions.
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Influencing Factors. Climatic and physical factors.
Energy resources.
Raw material.
Accessibility. (Transportation)
Market.
Model of Industrial Location : Losch.
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Weber’s Theory(1909)
least cost theory.
Minimum cost of
Transport, labor,
agglomeration.
Hotelling Theory (1932)
• dependent on production cost of various locations
Losch’s Theory (1939) Depend on Maximum
sales revenue.
Location Theory.
Model of Industrial Location : Losch.
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Who is Losch?• A German Economist. He wrote a book “ The Spatial
Organisation Of Economy” in
1939. • later on it translated in English as “The
Economics Of Location” in 1954.
• He gave theory of profit maximasation.
August Losch.(1906-1945) Model of Industrial Location : Losch.
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Maximum Profit Theory. (Losch theory)Assumptions:-
• Isotropic plane or Homogeneous plane.
• Identical preference among the population.
• Evenly distributed population.
• As distance rose so did cost.
• People acted economically rational.
Model of Industrial Location : Losch.
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Theory • Location of a company lies where the Net Profit is
greatest.
• Net Profit = Cost of Product – Sales Revenue.
• Entrepreneurs refers a location where difference is greatest.
• This theory is mainly built on sales revenue rather than production and distribution costs.
Model of Industrial Location : Losch.
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Graphical Representation.
Zone of profitability.
Cost
Revenue
(Price)
(Space)
Model of Industrial Location : Losch.
A B C
D
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Examples.
Model of Industrial Location : Losch.
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Nearest example “ Chitale Industries”.
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Criticism. It is very difficult to pinpoint single best location.
• labor will be substituted by automated machineries.
• Increasing transport cost can manage by reducing land rent.
• From this substitutional principles , no. of location may appear as optimal location.
Problem arise when whole series of points exist where total sales revenue is equal to cost of production.
Model of Industrial Location : Losch.
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Questions ?
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The End….