CH. 12 - Establishing Operations

Which of the following statements regarding quality is correct?

Quality is an assumed standard in most manufacturing and service industries

True or False: Commercial real estate firms are a source of unparalleled information for new business owners trying to locate their business.

True

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

True

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

the endorsement of the incubator operator

Planning is the ______ step in the entrepreneurial development process.

first

______ stores are major retail stores, such as department stores.

Anchor

Leasing equipment can ______ for a new business.

have the lowest initial cost

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

help entrepreneurs visualize the business's start-up activities

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

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

______ businesses have a production process.

All

Both suppliers and customers ______.

are concerned that the new business will be around in the future before they will consider conducting business with that firm

A ______ chart shows how the activities necessary to start a business fit together and build on each other.

critical path

When a business has gained legitimacy in the eyes of its stakeholders, it ______.

is considered to be a genuine business that will still be in operation next year

A chart that provides a detailed understanding of a firm's production process is called a(n) ______ ______.

production chart

Critical path charts ______.

should be updated on an as-needed basis

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

underestimate

Which of the following statements about being an entrepreneur is correct?

True entrepreneurs put their research into action.

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

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

most

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

strategic alliance

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

- A business checking account to pay bills - A business credit card for business expenses - Revolving line of credit for working capital

How can a strip shopping center's location affect its vacancy rate?

- A poor location can make it difficult for tenants to stay open - A good location can bring additional customers to the center's stores - Its location is often a driver of year-round sales

Which of the following statements regarding purchasing a production management system are correct?

- An industry trade association can help new business owners network with companies that can provide advice - A little effort investigating the industry should provide tremendous positives for an organization - There are many options out there to choose form

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

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

Which of the following serve as guidelines for entrepreneurs of new businesses when establishing a revolving line of credit, acquiring a business credit card account, and setting up a basic business checking account with banks?

- Confirmatory signatures should be used to ensure the parties know where major expenses occur and that bills are accurate. - These accounts should have a primary signatory and a confirmation signatory as an audit safety condition.

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

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

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

- Lifestyle issues - Cycles in purchasing or supply patterns - General market environment

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

- Located parallel to a well-traveled road - A one-story retail center - Usually has no anchor stores

Which of the following are the actions that must take place to start up a business?

- Manage time - Select a location - Gain legitimacy

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

- Quality - Production charting

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

- Security deposits - License and inspection fees - Initial advertising expeneses

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

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

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

- The order that tasks should be performed - Which tasks must be preformed sequentially - Which tasks can be handled concurrently

Which of the following statements regarding purchasing new equipment are true?

- There could be significant delays if the equipment is back ordered. - It guarantees that it is the most current available. - Most often, the equipment is delivered directly to the new business.

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

Which of the following statements regarding creating processes are true?

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

Creating a critical path chart can help with which of the following new business start-up problems?

Taking up to two or three times longer for the business to generate revenues.

Which of the following is NOT a legitimate reason to not pursue a business idea?

There is too much research that needs to be done.

The basic equipment necessary to start a business ______.

can be a quite expensive investment

All business owners should ______.

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

A strategic alliance can help a firm ______.

develop more consistent, high-quality products

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

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

One purpose of a critical path chart is to ______.

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

The new business owner should consider how quickly ______.

the business may outgrow the piece of equipment

Dr. W. Edwards Deming is considered the father of ______ in the United States.

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