1978 DOE SPS Economic Demographic Issues

a product of variations from place to place in demand and of the locational interdependence of firms.5 For those industries to which this school of thought applies, little relocation of industry to rectennae-bearing regions will occur. Future research should identify specific industries to which the particular theories apply and then to select those theories as a basis for the further study of rectenna siting impacts. 2.1.4 Integration of Least-Cost and Locational Interdependence Melvin Greenhut has provided the most logical theory in attempting to integrate the least-cost and locational interdependence theories. Of particular value is Greenhut’s discussion of the location factors. He lists these as transportation, processing costs, the demand factor, and what he describes as "cost-reducing” and ’’revenue-increasing" factors. Generally, he notes, one factor is of particular importance, with secondary factors coming into play when the governing factor gives alternative sites. Transportation costs become the most important factor in the localization of manufacturing when processing costs, market demand, and personal factors are held constant. When transportation costs dominate, they become an important influence in the decentralization of an industry. Processing costs may dominate in localizing industry when neither transport costs nor market conditions demand a location at the market center. The raw materials source appears to have little or no locational influence on an industry when the cost of transport is negligible, or when the freight cost is substantially the same for raw materials and the finished products. Greenhut’s theory of industrial location attempted to correlate the demand and market approach. Thus, there is an integration of cost and demand influences that are considered codeterminants of location. This integrated theory includes: cost factors, demand factors, and purely personal considerations. Only when all of these factors are considered in determining the location of an industry can an understanding of the forces for determining location be acquired. The core of Greenhut’s theory is summarized as follows: "... each firm entering the competitive scene will seek that site from which its sales to a given number of buyers (whose purchases are required for the greatest possible profits) can be served at the lowest total cost ...nl

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