Question

Which of the following is not generally true of an industrial location?

A. If the cost of transporting the product to customers exceeds the cost of transporting inputs, then the optimal plant location is as close as possible to the source of raw materials.
B. If the cost of transporting the product to customers exceeds the cost of transporting inputs, then the optimal plant location is as close as possible to the customer.
C. A manufacturer tries to locate its factory as close as possible to both buyers and sellers.
D. If inputs, such as raw materials for production (metal ores, coal, water, etc.), are more expensive to transport than products, the optimal location for a factory is near the source of inputs.
E. The farther something is transported, the higher the cost.

Answer 1

The incorrect statement is B, suggesting that the optimal plant location is always near the customer if the product transportation cost is higher. Weber's Location Model and other factors such as land cost and accessibility indicate that this is not a universal truth.

Step-by-step explanation:

The statement that is not generally true of an industrial location is B: "If the cost of transporting the product to customers exceeds the cost of transporting inputs, then the optimal plant location is as close as possible to the customer." This is not always correct because several factors influence an industrial location decision. It often depends on the specific circumstances of production and the relative costs. If inputs are more costly to transport, then the optimal location might be closer to the source of inputs rather than the customers.

Weber's Location Model helps us determine that cost minimization is a critical factor in the site selection process. This model suggests locating a factory at a point that minimizes transportation costs, which might be closer to input sources or markets depending on the respective costs. However, other considerations such as the cost of land, accessibility of transportation networks, labor and capital costs, and government policies also play significant roles in determining the best location.