Transportation Models in Studies of Interregional Competition

Abstract

Downloaded from998 RICI-IABB A. KaNC AND WILLIAM R. HF_,NRY state with a land area having homogeneous resources; bulky and perishable goods are produced near the city, while concentrated and durable products are drawn from more remote points. The theory is elaborated to include uneven distribution of resources; factories are so located that the summed costs of assembling raw materials and distributing finished goods are minimized. In contemporary location theory, much attention is given to determination of borders of raw material suppIy areas and product distribution areas; emphasis is placed upon the role of transportation costs in markets having.numerous competing firms.Location theory is rich in material for construction of models useful in empirical research. Two empirical studies using classical location theory have a special interest here; one is a 1942 study of Connecticut milksheds by Hammerberg, Parker, and Bressler, and the other is the 1952 award winning study of Northeastern milksheds by Bredo and Rojko. 3 Both studies are concerned with determination of competitive mŸ boundaries and the mapping of continuous price surfaces. Levels of fluid milk production and consumer requirements for milk products in small sectors of the price surface are taken as given, and boundaries of milksheds are determined by a time-consuming trial and error process. Both studies mention the impracticality of introducing supply and demand as variables depending upon price, and both note that the equilibrium solutions obtained would indirectly result in minimizing the total transportation costs involved in clearing the market.Point-trading models are closely related to the continuous price surface models described above. However, boundaries of surplus and deficit areas are taken as given, a representative shipping or receiving point is designated for each area, and the emphasis is placed upon determination of prices and quantities traded at the representative points. Transportation ModeIsThe transportation model is the simplest form of the poŸ models. The amount of surplus or deficit must be specified for each region. Additional specifications, necessary in all point-trading models, consist of the representative shipping or receiving points and the unit costs of transferring the commodity from each surplus to every deficit region. Boundaries of surplus and deficit regions may be delineated during preparation of input data for the transportation models, but such bound-a¡ ate not necessary.Equilibrium solution for the transportation model requires that the , D.

Size and location factors affecting California's beef slaughtering plants

“…How- 10 There are several studies in 'which this problem of plant location with economies of scale is considered in relation to assembly costs or distribution costs, namely Simmons (1959), Stollsteimer (1961), Mathia (1962), Olson (1959), Henry and Seagraves (1960), French (1960), Williamson (1962). King and Henry (1959) have written a useful article reviewing the use of the transportation model 'with modifications.…”

Interregional competitive position of the hog-pork industry in southeast United States

“…The transportation problem, in its usual form, is de fined by two dimensions-origins and destinations (27).…”