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Location and Manufacturing

Location and Manufacturing

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Location and Manufacturing

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  1. Location and Manufacturing

  2. Location Factors • Availability of Raw Materials • Location of Markets • Availability of Fresh Water and Power • Labour Supply • Transportation • Political Factors • Circumstance

  3. A food company should process fruit and vegetables as soon as possible, so it is extremely important for most Food Companies to locate near raw materials. Availability of Raw Materials

  4. A company should be located near their customers/market, so the delivery costs are minimized. Location of Markets

  5. Availability of Fresh Water and Power • Many companies like steel makers and oil refiners use a lot of water for cooling, cleaning purpose, and for electricity. Therefore it is important to locate near lakes and rivers.

  6. Labour Supply • A lot of companies in Canada need workers with advanced skills. • So its better for companies to locate in parts of the country that have the universities and colleges.

  7. Transportation • Its important for every company to have fast and efficient transportation. • Transportation is very important for most companies.

  8. Political Factors • The government can make decisions that will attract new business. • If they are not careful they can drive businesses away. • One example is they can offer a company reduced taxes for a couple of years or provide the land for a new factory.

  9. Circumstance • Your company will best be located in the area where its needed.

  10. Questions 2. Which of these is not a Location Factor? • a. Transportation • b. Availability of Financial Resources • c. Location of Markets • d. Circumstance

  11. Providing Services

  12. BASIC SERVICES • Basic industries provides services to people and businesses from outside the community • Communities could not survive without these services, because they bring money into their respective communities from outside.

  13. BASIC SERVICES EXAMPLE • The federal government in Ottawa provides services for Canadians throughout the country.

  14. NON-BASIC SERVICES • Non-basic services provide services for people and business located within the community. • These services do not generate money from outside sources. • These services get paid either directly or through your taxes and the money stays within the community.

  15. NON-BASIC SERVICES EXAMPLE • Transportation • Schools • Doctors/ Dentists • Local movie theatre

  16. Types of Industries There are four types of industry: • Primary • Secondary • Tertiary • Quaternary

  17. Tertiary Industries • Tertiary industries are industries that provide services and goods. • They are concerned with trade.

  18. Trade • Trade is divided into two categories: - Wholesale - Retail

  19. Trade Wholesale - selling goods and services to businesses or stores, but not to the public

  20. Trade Retail - selling products directly to the public - in stores, vending machines, over the telephone, through mail order, door-to-door sale, or over the internet.

  21. Quaternary Industries • Quaternary industries are highly specialized (and usually expensive), knowledge-based, technological and supportive.

  22. Question • An example of Basic Service is • Schools • The Federal Government • Doctors / Dentists • All of the above

  23. Questions 2. Quaternary industries are specialized • Not • Lowly • Highly • None of the above

  24. Economic Connections

  25. Offshore Oil – Hibernia Hibernia is the largest of two oil rigs off the coast of Newfoundland & Labrador. It is situated on the Grand Banks. Specially designed to withstand 160 mph winds and waves of 30 meters. Located about 315 km southeast of St. John’s. Drilling takes place in about 80 meters of water.

  26. Hibernia consists of two parts • Topsides Production Facilities • Gravity Base Structure. • Topsides consists of five super modules containing the crews living quarters and the drilling and production equipment. • In addition, there are seven other structures including cranes, lifeboat stations, and a heliport.

  27. 1979 - Chevron Canada Resources drilled a discovery well into the northeastern portion of the Grand Banks. • 1984 - They had drilled nine more wells into the area. • 1985 - Findings were presented to a federal-provincial environmental assessment panel to promote the development of an oil project on the Grand Banks. • 1990 - Project approved and a 25 year lease was given to the Hibernia Management and Development Company to construct and operate the facilities. • 1997 - Oil and gas production begins.

  28. Provides nearly 2500 Newfoundlanders with work and transferable skills. • Strict measures taken to prevent oil spillage from contaminating the water. • An “Iceberg Management Program” detects and tracks icebergs to reduce the probability of a collision with the GBS. • The Rig has 16 concrete teeth protruding from its circumference – they are designed to absorb the impact of a 1 million tonne iceberg without damage.

  29. Canada’s Circulatory System

  30. Rail Travel • After WW II - travel by trains decreased drastically. • People were traveling by cars and buses which had become more reliable. • This was caused by improvements to highways and lower costs for flights. • This decline resulted in annual Railway losses into the millions of dollars. • Railway companies could no longer afford maintenance and repair. • Passenger travel decreased as a result. • The federal government created Via Rail to run the few passenger services.

  31. Road Travel • Roads are our most common means of transportation. • Government spends more than $7 B annually on construction/maintenance of more than 900 000 kilometers of Canadian roads.

  32. Roads are used by about 19 M vehicles. Road travel plays a vital role in Canada’s economy because the government builds and repairs roads while drivers pay to fix, buy, and insure their vehicles.

  33. Automobiles • More people travel by cars/trucks because of their flexibility. • Motorists operate vehicles independently and may drive at their own pace, in relative comfort and privacy.

  34. Buses • Buses are a major method for traveling between cities and distances below 1000 km. • They are used by over 1 B individuals because of their inherent advantages… • Relatively inexpensive, comfortable, convenient, avoid traffic, and reduced vehicle emissions.

  35. Air Travel • Few countries depend on air travel as much as Canada because of the great distances between our cities. • By 2004, Air Canada fell under bankruptcy protection due to deregulation. • Our government promptly sole Air Canada to private investors. • Deregulation and the sale of Air Canada proved to be a “mixed blessing” for the air travel industry and consumers.

  36. Impact of Deregulation on the Industry • Increased Competition. • More airlines allowed to operate flights into and out of Canada. • Often, new airlines offered more frills to their customers, such as catered meals on board, business-class seating, frequent-flyer programs, and movies. • Most competitors offered ticket prices that were much cheaper. • As a result, Air Canada was forced to lower ticket prices. • However, this proved difficult because of Air Canada’s higher operational expenses.

  37. Impact of Deregulation on the Public • Those living in large cities benefited greatly from deregulation. • Competition forced airlines to lower their prices and offer more incentives. • Customers were also provided with greater flight selections, options, and choices.

  38. Some smaller communities are only serviced by Air Canada. • This means that Air Canada’s prices and offers no longer have to compete with that of other airlines. • There is also the fear that if Air Canada shuts down these small communities will not be served by any airline because other airlines may not see enough profit in serving them.

  39. Future of Air Travel in Canada • Employees agreed to wage concessions to make the airline more competitive. • Attempts have been made to obtain additional funding for operations. • However, the effects to the terrorist attacks on the United States in 2001 are still present. • People seem more reluctant to fly and also are inconvenienced by the cost and delays resulting from tighter security measures. • Nevertheless, because of the expanse of our country, air travel will remain a vitally important component of Canada’s transportation system.

  40. Travel by Ship • Although travel by ship is not very common in Canada, it is still very important I regions like Newfoundland and Vancouver Island. • It is less convenient than other ways of travel due to operating expenses and the dependence on weather.

  41. Movement of Goods Moving Cargo by Rail • Trains are a cost effective way to move freight. • One way to move cargo very cheaply is to use unit trains. • They carry only one type of cargo along fixed routes. • These trains use special cars designed to carry particular cargo and make for easier loading and unloading. • In the 1950’s and 1960’s trains faced stiff competition from trucks. • Trucks have an advantage because they are not constricted by tracks. • They are also able to take shorter routes and do not have the added burden of having to transfer shipments from one vehicle to another.

  42. To compete with the trucking industry, railways developed the Piggyback System which combines the advantage of trucks with rail. The system runs as follows: • A truck trailer is loaded. • It is pulled by a truck to a nearby rail yard and loaded onto flatcars • The train moves the trailer to a distant rail yard near its destination where it is unloaded. • The trailer is then trucked to its final destination.

  43. Another solution involves the use of shipping containers. • Freight is shipped in large metal boxes of standard size and shape which can be moved efficiently by trains, trucks, ships, and/or planes. • This system offers less risk of theft, reduces damage to goods, and consumes less time.

  44. Moving Cargo by Road • Trucking has many advantages over rail transport: • Trucks cost less to buy and maintain than railway cars and engines • Truck terminals are less expensive to build than train terminals • Trucks are not restricted to fixed routes • Trucks are better suited to carry lighter, less bulky cargoes • Efficient intercity trucking is a fairly recent development. • Before WWII, trucks were not used often because they were small, less reliable, and roads were not dependable. • A significant improvement in all of these categories has made trucking more convenient and common.

  45. Moving Cargo by Air • Transportation of goods by plane is more expensive than other means. • It is usually used to ship goods of high value or those that need to reach their destinations quickly. • Examples are: non-perishable foods, machinery parts, and/or major pieces of construction or manufacturing equipment in need of repair. • Float planes provide an additional option for remote travel/delivery needs.

  46. Moving Cargo via Pipeline • Pipelines can be used to move gases, liquids, and solids that have been crushed and mixed with water. • In Canada, they are used to move crude oil and natural gas. • Pipelines are expensive to build, and are used when there is material of large quantity that is anticipated to last for many years – or, if it is inopportune to transport by other means. • There are plans to build more pipelines provided they make economic sense. • This may occur over the next 5 - 50 years, or not at all.

  47. Some Questions… Where is the Hibernia located? • Coast of Labrador and Newfoundland • Grand Banks • Arctic Ocean • Hudson Bay

  48. How many barrels of oil can the Gravity Base Structure hold? • 2 Million • 500,000 • 1.3 Million • 1.9 Million