ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Nearness to the sources of raw materials would reduce the cost of production of the industry. For most of the major industries, the cost of raw materials form the bulk of the total cost. Therefore, most of the agro-based and forest-based industries are located in the vicinity of the sources of raw material supply.

Detailed explanation-2: -Because it costs more to transport something the heavier it is (as a general rule) “bulk-reducing industries” usually have their manufacturing centers close to the sources of raw materials, whereas “bulk-gaining industries” usually have their manufacturing centers close to the source of various large markets.

Detailed explanation-3: -In case the industry is weight gaining or the product is perishable, the attractive locations are the ones near the market or the point of consumption. Such industries are called market-oriented industries. Most of bakery units producing perishable products like bread fall in this category.

Detailed explanation-4: -Industry locates close to the market in order to minimize transportation costs with low labor costs. an example would be soft drink bottling because weight is gained so its a bulk gaining.