Weber Industrial Location Model

The material index is the ratio of the weight of localized raw materials consumed to the weight of the finished product. When it exceeds one the manufacturing process loses weight — as in ore smelting or sugar refining — so transport is cheapest if the plant sits near the material source, and the industry is called material-oriented. When it is below one the product is heavier or bulkier than its localized inputs, so the plant is pulled toward the market and is market-oriented. The index thus predicts the orientation of the transport optimum before any geometry is solved.

Isodapanes are contour lines around the transport optimum that join points of equal additional transport cost incurred by moving the plant away from the least-cost transport site. They let Weber test whether a deviation pays: a cheaper-labour town or an agglomeration of related firms is worth moving to only if the labour or clustering savings there exceed the extra freight cost shown by the isodapane passing through it — the critical isodapane being the break-even contour. They turn the qualitative labour and agglomeration forces into a quantitative trade-off.

Both are least-transport-cost location theories built on a uniform plain, and Weber explicitly extended von Thünen's reasoning from agriculture to industry. Von Thünen asked, given a fixed market, how land uses arrange themselves by distance and rent; Weber asked, given fixed material sources and a market, where a single plant should sit to minimize hauling. Von Thünen's bid-rent logic also fed forward into Alonso's urban model, so the two together form the backbone of classical location theory in economic geography.