Due at the End of the Period Today!

Industrial Location Assignment

APHG

Partners: ,

Due at the end of the period today!

You and your partner have just pioneered the invention of a new beer (described below.) Now, you and your partner must find a place for your brewery.

What is the name of your beer?

For the product listed/described below, rank five existing U.S. cities as justifiable locations for a potential brewery. Rank them on a 1-5 scale in terms of desirable location (1= most desirable, 5= least desirable.)

After you have ranked the five cities, you must indicate why each city made your list of desirable locations for your brewery. For example, choose cities that you think might have a lot of beer consumers, cities that might be close to a source of freshwater (Sweetwater Brewery in Atlanta-uses the Chattahoochee River), cities that are close to bottling industries, etc. Use the technology provided to assist you.

It will be helpful to make a simple list of pros/cons for each location.

List of Potential Locations for a Brewery in the United States:

Product: Beer

Beer is the world's most widely consumed and probably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly maltedbarley and malted wheat. Sugars derived from maize (corn) and rice are widely used adjuncts because of their lower cost. Most beer is flavored with hops, which add bitterness and act as a natural preservative, though other flavorings such as herbs or fruit may occasionally be included. Some of humanity's earliest known writings refer to the production and distribution of beer: the Code of Hammurabi included laws regulating beer and beer parlors, and "The Hymn to Ninkasi", a prayer to the Mesopotamian goddess of beer, served as both a prayer and as a method of remembering the recipe for beer in a culture with few literate people. Today, the brewing industry is a global business, consisting of several dominant multinational companies and many thousands of smaller producers ranging from brewpubs to regional breweries.

The strength of beer is usually around 4% to 6% alcohol by volume (abv) though may range from less than 1% abv, to over 20% abv in rare cases.

The process of making beer is known as brewing. A dedicated building for the making of beer is called a brewery, though beer can be made in the home and has been for much of its history. A company that makes beer is called either a brewery or a brewing company. Beer made on a domestic scale for non-commercial reasons is classified as home-brewing regardless of where it is made, though most homebrewed beer is made in the home. Brewing beer is subject to legislation and taxation in developed countries, which from the late 19th century largely restricted brewing to a commercial operation only. However, the UK government relaxed legislation in 1963, followed by Australia in 1972 and the USA in 1979, allowing homebrewing to become a popular hobby.

The purpose of brewing is to convert the starch source into a sugary liquid called wort and to convert the wort into the alcoholic beverage known as beer in a fermentation process effected by yeast.

Diagram illustrating the process of brewing beer

The first step, where the wort is prepared by mixing the starch source (normally malted barley) with hot water, is known as "mashing". Hot water (known as "liquor" in brewing terms) is mixed with crushed malt or malts (known as "grist") in a mash tun. The mashing process takes around 1 to 2 hours, during which the starches are converted to sugars, and then the sweet wort is drained off the grains. The grains are now washed in a process known as "sparging". This washing allows the brewer to gather as much of the fermentable liquid from the grains as possible. The process of filtering the spent grain from the wort and sparge water is called wort separation. The traditional process for wort separation is lautering, in which the grain bed itself serves as the filter medium. Some modern breweries prefer the use of filter frames which allow a more finely ground grist. Most modern breweries use a continuous sparge, collecting the original wort and the sparge water together. However, it is possible to collect a second or even third wash with the not quite spent grains as separate batches. Each run would produce a weaker wort and thus a weaker beer. This process is known as second (and third) runnings. Brewing with several runnings is called partigyle brewing.

The sweet wort collected from sparging is put into a kettle, or "copper", (so called because these vessels were traditionally made from copper) and boiled, usually for about one hour. During boiling, water in the wort evaporates, but the sugars and other components of the wort remain; this allows more efficient use of the starch sources in the beer. Boiling also destroys any remaining enzymes left over from the mashing stage. Hops are added during boiling as a source of bitterness, flavour and aroma. Hops may be added at more than one point during the boil. The longer the hops are boiled, the more bitterness they contribute, but the less hop flavour and aroma remains in the beer.

After boiling, the hopped wort is now cooled, ready for the yeast. In some breweries, the hopped wort may pass through a hopback, which is a small vat filled with hops, to add aromatic hop flavoring and to act as a filter; but usually the hopped wort is simply cooled for the fermenter, where the yeast is added. During fermentation, the wort becomes beer in a process which requires a week to months depending on the type of yeast and strength of the beer. In addition to producing alcohol, fine particulate matter suspended in the wort settles during fermentation. Once fermentation is complete, the yeast also settles, leaving the beer clear.

Fermentation is sometimes carried out in two stages, primary and secondary. Once most of the alcohol has been produced during primary fermentation, the beer is transferred to a new vessel and allowed a period of secondary fermentation. Secondary fermentation is used when the beer requires long storage before packaging or greater clarity. When the beer has fermented, it is packaged either into casks for cask ale or kegs, aluminum cans, or bottles for other sorts of beer.

After reading the previous material, answer the following questions. Type your answers or write clearly in the space provided.

1. List three variable costs that decision makers take into account when calculating efforts to maximize advantages.

2. What does friction of distance refer to? How is the concept of distance decay related to this?

3. According to Alfred Weber’s Least Cost Theory, what accounts for the location of manufacturing plants?

4. Now, put Weber’s theory into practice, in deciding where to locate your new brewery. Here’s the scenario:

Material (per case) / Rail Transport Cost / Road Transport Cost
Hops & Grain / $.10/mile / $.11/mile
Spring Water / $.05/mile / $.03/mile
Bottled Beer / $.25/mile / $.27/mile

According to Weber, where will you locate your new brewery and why? Indicate the location on the locational triangle below by putting drawing a factory within the triangle. The Rail Juncture (star) below is otherwise known as a break-of-bulk point (point where cargo can be unloaded and broken up into smaller units prior to delivery). You decide if its necessary to use it.

The above scenario only refers to transportation costs. They do not adequately account for variations over time. For example, when relative labor costs decline, or when land costs go down, an industry can sustain an increase in transportation costs-this is referred to as the substitution principle. What are five other variables to consider not mentioned by Weber that would affect the location of the brewery. In describing your five variables use terms such as bulk-gaining, bulk-reducing, break-of-bulk points, and target demographics.

According to the variables listed above and Weber’s Least Cost Theory, what actual modern-day U.S. city and sub-state would be the best location for your brewery? (You may choose one of those that you listed above)

Due Date: Thursday, November 19

Fladeboes are electronic health monitoring devices. They are designed to be worn as bracelets and send signals to a database/monitoring service when medical emergencies occur. They are highly sophisticated- silicon computer chips and copper wire are required. Highly skilled labor is needed for design and assembly. The target demographic is senior citizens, primarily. Fladeboes work best in sunnier climates, as precipitation can interfere with the electronic signals. The unit cost from start to finish is $99 and the projected market price is $159.

1)Things to consider:

Land costs (rent/purchase of land to build your factory)
Proximity to silicon, copper wire
Climactic conditions
Proximity to available methods of shipping (break-of-bulk points nearby, etc.)
Proximity to markets
Proximity to customers in the target demographic
Whether or not this product is bulk-gaining or bulk-reducing

2)Potential locations:

New Mexico
California
Nevada
Texas
Arizona

Due Date for Fladeboes and Beer: Thursday, Nov. 29