Bulk Reducing vs. Bulk Gaining Industries PowerPoint Presentation, PPT

Bulk Reducing vs. Bulk Gaining Industries PowerPoint Presentation, PPT - DocSlides

Chapter 11-Key Issue #2. Why are situation and site factors important?. Proximity to inputs. Manufacturers try to locate their factories as close as possible to both buyers and seller. Every factory uses inputs. ID: 591049

Bulk Reducing vs. Bulk Gaining Industries PowerPoint Presentation, PPT - DocSlides Slideshow

By min-jolicoeur
Watch All docs

Likes : 40
Views : 101

Download this presentation

Click below link (As may be) to get this presentation.

Bulk Reducing vs. Bulk Gaining Industries PowerPoint Presentation, PPT - DocSlides

Download Note - The PPT/PDF document "Bulk Reducing vs. Bulk Gaining Industrie..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.

Presentations text content in Bulk Reducing vs. Bulk Gaining Industries PowerPoint Presentation, PPT - DocSlides

Slide1

Slide2

Bulk Reducing vs. Bulk Gaining Industries

Chapter 11-Key Issue #2

Why are situation and site factors important?

Slide3

Proximity to inputs

Manufacturers try to locate their factories as close as possible to both buyers and sellerEvery factory uses inputsInputs= materials, energy, machinery and supporting services

Slide4

Pg. 388

“The

optimal plant location

is as

close as possible to inputs

if the

cost of transporting raw materials

to the factory is

greater

than the

cost of transporting the products to consumers

.”

Slide5

Proximity to markets

Manufacturers try to locate their factories as close as possible to both buyers and seller (repeat)

Slide6

Pg. 388

“The

optimal plant location

is as

close as possible to

customer

if the

cost of transporting raw materials

to the factory is

ess than

the

cost of transporting the products to consumers

.”

Slide7

Mineral Resources

Minerals are important inputs for many industries because they have an abundance of industrial uses

Non-metallic minerals

90% that humans use

Building stones, gemstones

Minerals used in fertilizers

Nitrogen, phosphorus, calcium, sulfur

Metallic minerals

Valuable for fashioning machinery, vehicles, and essential elements of contemporary society

Malleable and ductile

Good conductors of heat and energy

Ferrous alloys

Chromium, manganese, nickel, titanium, and tungsten

Non-ferrous alloys

Aluminum. Copper, lead, lithium, magnesium, zinc, and precious metals

Slide8

Inquire and Think!!!

“So What?”Reflect on your notes so far and discuss with students around you, what have we learned so far that is important or worth further inquiry?

Slide9

Slide10

Bulk-Reducing Industry

Definition=An industry in which the inputs (materials, etc.) weighs more than the final product(raw materials weigh more than the final product)Needs to be located near its source of inputs to minimize transportation costs

Slide11

Slide12

Copper Industry

Mining:

the ore extracted is mostly waste

Concentration:

transforms the heavy, bulky copper ore into a much lighter material of high value

Smelting:

input for the smelters, who remove more impurities (bulk-reducing example)

Slide13

Bulk-Gaining Industry

Definition= Industry that makes something that gains volume or weight during production(finished product weighs more than the raw materials)Needs to be located near where the product is sold to minimize transportation costs More expensive to transport

Slide14

Slide15

Bulk Reducing Examples (do not write)

Copper

Steel

Finished copper bar weighs less than the copper ore used to make the productSeveral steps in the copper process that are bulk reducingMost foundries also need to be located close to energy sources (part of inputs)

Steel is an alloy of iron, manufactured by removing the impurities

Two inputs for steel are iron ore and coal, weighs more than the final product

U.S. steel production location has changed b/c of changing inputs

Today, more concerned with being close to markets

Slide16

Bulk Gaining Examples

Fabricated Metals

Beverage Production

Factory brings together metals (like steel) as inputs and transforms them into a more complex productLocated near markets because products are much biggerLargest market for fabricated metal and machinery is motor vehicles¾’s of vehicles sold in the U.S. are assembled in the U.S. http://www.msnbc.msn.com/id/3032619/#42140012

Empty cans or bottles given to producer and filled with beverage- thus adding bulk/weight

Water- heavy to transport, #1 ingredient in beverage

Slide17

Single-market Manufacturer

Specialized manufacturers with only 1-2 customersClose proximity to customersProducer of parts for motor vehiclesShip directly to the carmaker’s plants

Slide18

Perishable Products

Must be located near their marketBread and milkExample: Newspapers, why is this “perishable”?

Slide19

Motor Vehicle Production and Sales

Important to produce vehicles near market (why?)Regional distribution of production is extremely close to that for salesHowever, carmakers operate assembly plants in all 3 major industrial regions

Slide20

Changing Situation Factors: Steel

In the past, steel production was a good example of a bulk-reducing industry that located near its inputsthe increasing importance of proximity to markets has contributed to the growth of steel mini-mills

Slide21

Changing Distribution of World Steel Production

Between 1980 and 2013, the share of world steel production declined to 27% in developed countries (down from 81% in 1980)

Between 1980 and 2013, the share of world steel rose to 73% in developing countries (up from 19% in 1980)

Slide22

Truck, Train, Ship or Plane?

Trucks – short distance delivery

Rail – used for 1+ days, longer to load, no daily rests

Ships – very long distances, slower than land based

Air – very expensive…used for speedy delivery, small, high-value packages

Slide23

Break-of-Bulk Points

Mixed modes of delivery are often usedBreak-of-bulk point: a location where transfer among transportation modes is possibleContainerizationCosts rise each time inputs or products are transferred from one mode to another

Slide24

Just-in-Time Delivery

Shipment of parts and materials arrive at the factory moments before they are neededSuppliers must locate very close to they factories they supplyAdvantages:Reduces inventory costsAllows for reduction of factory sizeExample: computer manufacturersDisruptions: Natural hazardsTrafficLabor unrest

Slide25

Stop here

Slide26

Site Factors in Industry

For some firms, site factors are more important than situation factors in locating a factoryThe three most important site factors are labor, capital, and land

Slide27

Labor

Most important site factor on a global scale

Variation of labor costs around the world is large

½ billion workers are engaged in industry worldwide

China has 1/4

India 1/5

All developed countries combined: 1/5

Labor-intensive industry

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

Slide28

Capital