Entrepreneurship and Small Business Management, 2e (Mariotti)
Chapter 18 Location, Facilities, and Layout
1) Location strategy has critical impacts on which of the following?
A) Revenues
B) International trade policy
C) Family activities
D) Social security
E) News
Learning Obj.: LO 1
AACSB: Analytical thinking
2) ________ is/are not a consideration for the location of your business.
A) Media outlets
B) Access for customers
C) Climate
D) Convenience
E) Visibility
Learning Obj.: LO 2
AACSB: Analytical thinking
3) Which of the following is not a site location consideration?
A) Exchange rates and currency risk
B) Site size and cost
C) Zoning restrictions
D) Proximity of services/supplies needed
E) Environmental-impact issues
Learning Obj.: LO 2
AACSB: Analytical thinking
4) Which of the following is not a country location consideration?
A) Political risks, governmental regulations, national attitudes, and incentives
B) Cultural and economic issues
C) Location of markets
D) All of the above
E) None of the above
Learning Obj.: LO 2
AACSB: Analytical thinking
1
5) Manufacturers need to meet and exceed customer ________ goals.
A) Delivery and quality
B) Service and quality
C) Response and quantity
D) Delivery and quantity
E) None of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
6) Which of the following is a labor productivity issue?
A) Locating your business in a community with skilled workers
B) Locating your business in a family-oriented area
C) Locating your business beside a highway
D) Locating your business in a friendly city
E) Locating your business beside rail lines
Learning Obj.: LO 3
AACSB: Analytical thinking
7) All of the following are location factors for manufacturers to consider except ________.
A) Labor
B) Suppliers
C) Costs of facilities
D) Laws and regulations
E) Religious affiliations
Learning Obj.: LO 3
AACSB: Analytical thinking
8) For wholesalers, the ability to efficiently ________ goods to customers is the primary
consideration.
A) Distribute
B) Deliver
C) Allocate
D) Issue
E) Dispense
Learning Obj.: LO 3
AACSB: Analytical thinking
2
9) Primary location concerns of retail businesses with brick-and-mortar sites include which of
the following?
A) Drawing power of your location
B) Demographics of the customer-drawing area
C) Ability to attract paying customers in sufficient volume
D) All of the above
E) None of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
10) ________ are complementary businesses that attract customer traffic to the retailer’s area,
and can significantly increase revenue generation.
A) Traffic generators
B) Travel generators
C) Interchange generators
D) Passage generators
E) Transfer generators
Learning Obj.: LO 3
AACSB: Analytical thinking
11) Proximity to ________ competitors as traffic generators, clustering, may be a viable strategy.
A) Direct
B) Indirect
C) Mutual
D) Non
E) Both A and B
Learning Obj.: LO 3
AACSB: Analytical thinking
12) Resources for researching the average sales per square foot in your industry include
________.
A) International Council of Shopping Centers
B) The public library reference area
C) Annual reports of publicly traded companies
D) U.S. Census Bureau
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
3
13) The formula for calculating selling space is ________.
A) Sales Volume/Sales per Square Foot
B) Sales Volume/Sales per Linear Foot
C) Sales Volume/Cost per Square Foot
D) Sales Income/Sales per Square Foot
E) Net Sales/Sales per Square Foot
Learning Obj.: LO 3
AACSB: Analytical thinking
14) You expect that your store will generate $300,000 in annual sales with average sales per
square foot of $200, so you would need about ________ square feet of selling space.
A) 1500
B) 2000
C) 1000
D) 1200
E) 1800
Learning Obj.: LO 3
AACSB: Application of knowledge
15) Which of the following is not a major factor in retail stores’ costs?
A) Rental
B) Salaries
C) Wages
D) Production
E) All of the above are major factors.
Learning Obj.: LO 3
AACSB: Analytical thinking
16) The selection of a location is a critical business success factor, is often a one-time event, and
is generally ________ to change.
A) Expensive
B) Inexpensive
C) Difficult
D) Easy
E) All of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
4
17) The ________ method of selecting a location, go with the one you know, is commonly
employed by small business owners.
A) Simplest
B) Most complex
C) Most reliable
D) Most complicated
E) None of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
18) In the factor-rating method, decision criteria are prioritized and weighted to eliminate
________ factors from location analysis.
A) Subjective
B) Objective
C) One-sided
D) Biased
E) Skewed
Learning Obj.: LO 4
AACSB: Analytical thinking
19) Which of the following is not one of the six basic steps of the factor-rating method?
A) Develop a list of critical success factors.
B) Determine the weight of each factor according to its relative importance.
C) Create a measurement scale for the factors.
D) Multiply the factor weight times the factor score for each factor in each location.
E) Develop a list of questions to ask other store owners in the area.
Learning Obj.: LO 4
AACSB: Analytical thinking
20) Geographic information systems do not include ________.
A) Demographic data
B) Extensive maps
C) Topographic data
D) Major transportation routes
E) Business success rate figures
Learning Obj.: LO 4
AACSB: Analytical thinking
5
21) A decidedly more low-tech approach to assessing location is to collect ________ information
via the U.S. Census Bureau to create location options for consideration.
A) Demographic
B) Psychographic
C) Geographic
D) Competitive
E) All of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
22) ________ is done by using cost-volume analysis.
A) Location breakeven analysis
B) Location profit analysis
C) Location competition analysis
D) Location traffic analysis
E) Location customer analysis
Learning Obj.: LO 4
AACSB: Analytical thinking
23) For locating distribution centers, you can use a ________ method. This approach calculates
the best cost location for a single distribution center serving multiple outlets, whether company
retail locations or customer sites.
A) Center-of-gravity
B) Center-of-rotation
C) Center-of-importance
D) Center-of-seriousness
E) None of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
24) Which of the following is not considered using the center-of-gravity approach?
A) The location of the destinations
B) How much product will be shipped to them
C) The frequency of delivery
D) The cost of delivery
E) The per-unit cost of the product
Learning Obj.: LO 4
AACSB: Analytical thinking
6