Location of Industries in India Transport Cost Minimisation

The main objective of the present exercise is to test a methodology based on input-output analysis and linear programming for determining the optimal location of industries in various regions from the point of view of transport costs. For simplicity, uniform production relations in all the regions have been assumed. Further, it has been assumed that no cost of transport to involved for intra-regional movement of commodities and that all the goods traffic is being catered to by the railway at the existing rates. The analysis is conducted within the framework of a simple model involving four regions and five sectors.