Answer: Some geographic areas have obvious natural advantages that result in cluster formation. For example, proximity to a large port will attract exporting firms or areas rich in minerals will attract clusters of mining firms. In addition, there are three well-established reasons why firms choose locate in close proximity. The cost of transporting goods is reduced when firms are located close to their customers or suppliers. Input suppliers can exploit economies of scale in large clusters of downstream firms who, in turn, benefit from timely delivery and lower inventory costs.
Explanation: There are various types of clustering are that include:
^ Connectivity-based Clustering (Hierarchical clustering)
^ Centroids-based Clustering (Partitioning methods)
^ Distribution-based Clustering.
^ Density-based Clustering (Model-based methods)
^ Fuzzy Clustering.
^ Constraint-based (Supervised Clustering)
