Chapter 12: Establishing Operations

Which of the following statements regarding quality is correct?

Quality is an assumed standard in most manufacturing and service industries.

One important consideration related the all aspects of business is the owner's investment in quality.

True

When selecting a bank, a new business owner should ensure that the bank has an expertise in his or her type of business.

True

Business incubator tenants gain a perception of legitimacy due to having ____________.

the endorsement of the incubator operator.

Entrepreneur should do which of the following when analyzing a strip shopping center location for their new business?

Know the area's traffic patterns Consider the center's vacancy rate Examine the area's customer demographics

Establishing a production management system to handle the most common and expected routines of a business will ensure consistent handling.

True

The term _______ describe a business that has been accepted by key stakeholders who believe that the firm is genuine.

legitimacy

Business incubators help build the perceived legitimacy of a new business _____________.

with the look of a more professional presentation as well as the the endorsement provided by the operator.

Entrepreneur should typically locate their business based on the _________.

actual strategy of the business.

Business owners would be wise to ________.

change one thing at a time

Leasing equipment can be _____ expensive over the long term.

more

According to Deming, if business owners allow quality goals to drive every action, the firm might make _______.

short-term decisions that are determined to the business's overall direction.

Many entrepreneurs learn that it takes a business's ________ longer for their business to be able to generate revenue. This problem can be solved by a critical path chart.

2 or 3 times

It is common for a piece of new equipment to depreciate ____________% or more during the first year.

50

Small business owners should establish a relationship with a local bank for which the following services that are considered critical for a small businesses' success?

A business credit card for business expenses revolving line of credit for working capital a business checking account to pay bills

Which of the following are examples of an anchor store?

A national home improvement chain A regional department retailer

Which of the following are characteristics that describe a strip shopping center?

A one-story retail center Usually has no anchor store located parallel to a well-trained road

Which of the following are classic items that make new businesses look legitimate?

A professional letterhead, business cards, and invoices A high-quality Internet site A business checking account with check numbers higher that 101

________ store are major retail stores, such as department stores.

Anchor

Which of the following statements about selecting a location are correct?

Business location can be graded by the type and amount of traffic that the location draw. Entrepreneurs should carefully consider matching their business with the type of location best suited. Both the business's short- and long- term needs should be considered when looking for the right location.

Which of the following are steps that will help business owners manage their time during the start-up process?

Prioritize tasks by level of importance segment tasks between short and long term keep a notebook or electronic diary to track what must be accomplished that day.

Which of the following are the two most important elements to production management systems?

Production charting quality

Which of the following are typically payments or fees that a new business may pay before starting operations?

Security deposits utility setup fees purchase or lease of intial equipment and installment all licenses and inspections all initial supplies (this is a significant and often overlooked expense) Hiring and training of intial staff initial advertising expenses bank set-up fees

One purpose of a critical path chart is to __________.

Shows which activities can occur concurrently and which must already be in place before the next activity can occur.

Which of the following statements regarding critical path charts are correct?

They are imperative for organizing the start-up process. They are useful for keeping track of deadlines They can help entrepreneurs avoid costly scheduling mistakes.

Sean plans to start a fast-food joint aiming at students. He has a seed capital of $150,000. Which of the following locations should he ideally choose for the joint?

a university shopping center

The basic equipment necessary to start a business _______

can be quite expensive investment.

All business owners should _________.

develop a plan to establish and continually enhance their business's legitimacy.

Commercial real estate firms help new business owners locate their business. The real estate agents focus extensively on __________.

ensuring that the new business signing a lease is successful

The moer an entrepreneur becomes involved in establishing a business and its operations, the less individuals will wish to visit with the entrepreneur about the business.

false

A production management system defines the steps that are involved in moving ________.

from the product or service offering to the point where the business receives payment.

Which of the following factors should an entrepreneur primarily consider when deciding the time to start a business?

general environment competitor moves cycles in purchasing/supply patterns lifestyle issues

The main purpose of a critical path chart is to ______.

help entrepreneurs visualize the business's start-up activities.

Which of the following are the purpose of a critical path chart?

it shows which tasks can be handled concurrently it shows the order that tasks should be performed it shows which tasks must be performed sequentially

One of the _______ important steps in starting a business is identifying either purchasing or leasing business location

most

Critical path charts _______.

should be updated on an as-needed basis.

Which of the following statements regarding creating processes are true?

spending time developing production systems prior to starting up often results in financial savings.

A(n) ______ is when two or more firms join together to form a long-term, mutually beneficial relationship.

strategic alliance

A ______ is a small retail center typically located along a major road.

strip shopping center

The new business owner should consider how quickly ________.

the business may outgrow the piece of equipment

When inputs are not of high quality, _________.

the output has no change to be high quality.

Dr W Edwards Deming is considered the father of ____ in the United States US

the quality movement

According to Deming, companies should focus on __________.

the quality of a supplier's inputs

According to Deming, when it comes to creating quality goods and services, businesses should be guided by ________.

the scientific method

Which of the following statements regarding purchasing new equipment are true

there could be significant delays if the equipment is back ordered most often, the equipment is delivered direction to the new business it guarantees that t is the most current available.

Many new business owners __________ the time it takes to begin operations, and their business is harmed.

underestimate