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The term given to zones in northern Mexico with factories supplying manufactured goods to the U.S. market. The low-wage workers in the primarily foreign-owned factories assemble imported components and/or raw materials and then export finished goods.

NAFTA (North Atlantic Free Trade Agreement)

agreement that created free-trade area among the US, Canada and Mexico

Cottage Industries

Home-based manufacturing where people made household tools and agricultural equipment in their own homes or village.

Bulk-reducing industry

An industry in which the final product weighs less or comprises a lower volume than the inputs. Ex: cotton industry

Bulk-gaining industry

An industry in which the final product weighs more or has a greater volume than the inputs. Ex: beer industry

Break-of-bulk point

A location where transfer is possible from one mode of transportation to another.

Labor intensive industry

An industry in which labor cost is a high percentage of expense.


Form of mass production in which each worker is assigned one specific task to perform repeatedly.


World economic system characterized by a more flexible set of production practices in which goods are not mass produced; instead, production has been accelerated and dispersed around the globe by multinational companies that shift production.

Trading blocs

A type of agreement where regional barriers to trade are reduced among the participating states.

Foreign direct investment (FDI)

Investing in the U.S.'s businesses by foreign citizens.

Export processing zones

Industrial parks for foreign companies to conduct export-oriented manufacturing.


A process involving the clustering or concentrating of people or activities. The term often refers to manufacturing plants and businesses that benefit from close proximity because they share skilled-labor pools and technological and financial amenities.


To give out or obtain things from an outside supplier or source.

Just-in-time delivering

A production strategy striving to improve a business return on investment by reducing in-process inventory and related carrying costs. Ex: grocery store produce section

Ancillary Activities

economic activities that surround and support large-scale industries such as shipping and food service.

Situation factors

Location factors related to the transportation of materials into and from a factory.

Site factors

Location factors related to the costs of factors of production inside the plant, such as land, labor, and capital.

Least Cost Theory

Model developed by Alfred Weber according to which the location of manufacturing establishments is determined by the minimization of three critical expenses: labor, transportation, and agglomeration.Concluded market or material oriented industries.


The use of economic, political, and cultural pressures to influence other countries, especially former dependencies.

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