August Lösch in The spatial organization of economy and The Economics of location uses a different approach

August Lösch in The spatial organization of economy and The Economics of location uses a different approach: it is based on the idea that the main objective for production localization it is not cost reduction but profit maximization (to be achieved in the most profitable market area). Lösch expands the work of Christaller. If in Christaller’s model, the distribution of goods and accumulation is totally based on location and transportation, Lösch focuses in creating and ideal environment for consumers and in increasing their welfare. Lösch approach the industry’s position choice is not necessary dictated by the need of cost reduction (transport or labor cost) but it would be motivated by the areas where the biggest profit occurs. So, he emphasize more on the total production cost than on transportation and labor cost. Lösch divides the economic landscape in hexagons that represents market areas for each production type or commodity. The hexagons’ perimeters act as transport networks and, after he minimizes the transport effort, the resulting networks are ordered around a common center. The model thus foresees that in the center of this economic landscape would develop a big metropolis characterized by a high local demand, population and settlement localized in rich districts and agglomeration of industries within the city and along its borders to satisfy the latter achieving at the same time the least-transport-cost.