77) A bakery is an example of a business that may benefit from intentional use of ________
within the space.
A) color
B) music
C) smell
D) lighting
78) The most progressive companies seeking environmentally-friendly designs are using:
A) all new materials, installing high efficiency lighting, and striving to meet LEED standards.
B) recycled materials, installing high efficiency lighting, and meeting building code standards.
C) recycled materials, installing high efficiency lighting, and striving to meet LEED standards.
D) recycled materials, installing high cost lighting, and striving to meet LEED standards.
79) An effective retail layout should:
A) pull customers into the store.
B) make it easy for customers to locate the merchandise they are looking for.
C) take customers past displays of items they might buy on impulse.
D) All of the above
80) The most valuable space in a store is the:
A) nonselling space.
B) main entry-level space.
C) space at the back of the store.
D) left-side, entry-level space.
81) Products with the highest markup should be placed:
A) so as to pull customers into the store.
B) in prime selling space.
C) near the front of the store.
D) anywhere since they draw their own customers.
82) When the typical shopper enters a store, (s)he turns ________ and moves in a ________
fashion which increases the value of this section of the space.
A) left; clockwise
B) right; clockwise
C) left; counterclockwise
D) right; counterclockwise
83) Which of the following sections of a retail store would be most valuable?
A) Third floor
B) Intersection of two secondary aisles
C) The front right corner of the store
D) The front left corner of the store
84) Which of the following statements concerning store layout is true?
A) The farther an area is from the store’s entrance, the greater its value.
B) Most shoppers turn left upon entering a store and move around it in a clockwise fashion.
C) Only about one-fourth of a store’s customers will go more than halfway into a store.
D) The second quarter of the store is worth one-half of the front quarter.
85) What is the 40-30-20-10 rule in retailing?
A) A way of figuring who your best and worst customers are
B) A formula for calculating the ratio of expenditures on signage, displays, advertising, and
interior decorating
C) An expression of the decline of the value of store space as you move front to back in the store
D) The percentage of customers who move straight into a store, go right, go left, leave before
fully entering
86) Manufacturing layout decisions take into consideration:
A) customer buying behavior, the types of product sold, and the physical dimensions of the
building.
B) the status of the building: built, bought, or leased, and the type of product sold.
C) the product, the process, the space availability within the facility, ergonomic considerations,
and key economic considerations.
D) the employees, the customer, and the mechanical process used to produce the product.
87) The objective(s) of a manufacturing layout include:
A) efficiency.
B) productivity.
C) quality.
D) All the above
88) An arrangement of workers and equipment according to the sequence of operations
performed on a product is called ________ layout.
A) fixed position
B) process
C) product or line
D) procedural
89) A process layout would be best suited to:
A) an automobile assembly plant.
B) an oil refinery.
C) a manufacturer of handmade metal gifts.
D) a textbook publishing plant.
90) A good manufacturing layout requires all but which of the following?
A) Flow/process study
B) Easy adjustment to changing conditions
C) Good housekeeping
D) An assembly line
91) Two important criteria for selecting and designing a production layout are:
A) worker effectiveness and material handling costs.
B) worker effectiveness and maximum visibility.
C) space use and proximity to raw materials.
D) material handling costs and overall convenience factors.
92) An arrangement in which materials do not move down a production line but rather, because
of their weight, size, or build, are assembled on the spot is called a ________ layout.
A) fixed position
B) process
C) product
D) line
93) The key to finding a suitable location is identifying the characteristics that can give a
company a competitive edge and then searching out potential sites that meet those criteria.
94) By collecting a wealth of data on possible locations, entrepreneurs will find that the location
decision is made for them.
95) The first level of the location decision is the selection of a particular region of the country.
96) The first phase in selecting a location is determining what regions of the country are
experiencing substantial growth.
97) When conducting a regional evaluation, one of the first places an entrepreneur should turn
for information is the U.S. Census Bureau.
98) Published annually, Sales and Marketing Management’s Survey of Buying Power provides a
detailed breakdown of population, retail sales, spendable income, etc., for various census
regions, states, etc.
99) The Zip Code Atlas and Market Planner provides detailed information on sales, spendable
income, etc., by census region, county, and city.
100) Geographic Information Systems (GIS) are powerful software programs that allow
entrepreneurs to pinpoint the ideal location for their businesses.
101) The U.S. Census departments “TIGER” file is a computerized map of the entire United
States that gives entrepreneurs the power to pinpoint existing and potential customers.
102) By studying the demographics of a proposed location, a small business owner can
determine how well it matches the market for the owner’s product or service.
103) When the cost of transporting a product is high relative to its value, locating close to the
market a manufacturer plans to serve is critical.
104) Proximity to needed raw materials is critically important for a service firm.
105) When analyzing the labor supply, a small business is concerned only with the level of
education and training of the labor force in the area.
106) When choosing a location, a small business owner should match the characteristics of the
labor force her company requires with the characteristics of an area’s available labor pool.
107) Knowing the type of labor a business needs and preparing job descriptions and job
specifications in advance will help a business owner determine whether or not there is a good
match with the available labor pool.
108) The most important factor when evaluating the labor supply in an area is its prevailing wage
rate.
109) The “friendliness” of the overall business environment is an important consideration in
location selection and information is available to offer objective insight for this assessment.
110) The choice of the location for a Tiffany & Company should be determined by the
compatibility with the community it will serve.
111) Zoning is a system for mixing types of business and industrial activities in order to make
maximum efficient use of the area.
112) Zoning is a system that divides a city or country into small cells or districts to control the
use of land, buildings, and sites.
113) A variance is a special exemption to a zoning ordinance.
114) For many entrepreneurs, quality of life is one of the key determinants of their choice of
locale.
115) Few decisions are as important for retailers as the choice of a location.
116) One element of the location decision common to all businesses is the need to locate where
customers want to do business.
117) Criteria for a “good location” are universal and apply to all types of small businesses.
118) Generally, the larger a retail store and the greater its selection, the broader its trade area
size.
119) A company’s trade area can be influenced by intangible factors, such as physical and
political barriers.
120) Clever business owners choose their location with an eye on the surrounding mix of
businesses.
121) Retail compatibility describes the benefits a company receives by locating near other
businesses selling complementary products and services.
122) The Index of Retail Saturation (IRS) is a measure of the potential sales per square foot of
store space for a given product in a specific trading area.
123) To calculate the IRS, a retailer needs to know the number of customers in the area, the retail
expenditures for his product, and the total square feet of space allocated to selling his kind of
product in the trading area.
124) To calculate the IRS, a retailer needs to know the number of customers, the number of
competitors, and the total square feet of space allocated to selling his kind of product in the
trading area.
125) Reilly’s Law of Retail Gravity uses the analogy of gravity to estimate the attractiveness of a
particular business to potential customers.
126) The average community net income is the key factor in Reilly’s Law of Retail Gravitation
to determine the point of customer indifference.
127) Increased traffic flow can be beneficial to similar businesses located in close proximity to
one another, such as auto dealers, clothing retailers, and antique shops.
128) One of the key factors in choosing a location for a convenience store is finding a location
with high traffic volume and easy accessibility.
129) On average, the typical central business district has more parking spaces per square foot of
shopping space than the typical shopping mall.
130) Choosing a location in which many other businesses have failed can create a negative
image, even for a “new” business.
131) A location that has housed several businesses that have failed within the past few years is
likely to have a bad reputation and a negative image.
132) Because they are centrally located, central business district locations offer business owners
the ability to attract customers from the entire trading area of the city.
133) Many central business districts suffer from intense competition, high rental rates, traffic
congestion, and inadequate parking facilities.
134) The typical neighborhood shopping center contains from 3 to 12 stores and serves a
population that lives within a 10-minute drive.
135) A community shopping center contains from three to twelve stores and serves a population
that lives within a 10-minute drive.
136) A community center is an upscale shopping experience with specialty stores, dining and
entertainment in an outdoor setting.
137) A power center combines the drawing strength of a large regional mall with the
convenience of a neighborhood shopping center.
138) A regional shopping mall serves a large trading area (10 to 15 miles or more), contains from
50 to 100 stores, and draws customers from a population that lives within 20 to 40 minutes
driving time.
139) Clothing is one of the most popular items sold in regional shopping malls.
140) Shopping centers are always a wise location for a small business owner to choose.
141) The customer group that spends the most time in shopping malls are teenagers between the
ages of 14 and 17.
142) For some retailers, locating near competitors makes sense because similar businesses
located near one another can increase traffic flow to all.
143) Retailers should be careful not to locate near anyone in direct competition with them.
144) If a business sells merchandise for which customers typically do a good deal of comparison
shopping, it should choose a location as far away from competitors as possible.
145) The ideal location for a retail business is in the entrepreneur’s home.
146) For a service company that goes into its customers’ homes to perform its service, the choice
to locate in the entrepreneur’s home is a poor one.
147) A recent SBA study found that 52 percent of all small companies are home based.
148) Many home-based entrepreneurs whose businesses are successful run into problems with
zoning laws as they run businesses from locations in areas that are zoned “residential.”
149) Some entrepreneurs may find that a mobile business that takes their products and services
to their customers is an attractive “location” decision.
150) To ensure ready access to raw materials and to customers, a manufacturer should consider
the quality of an area’s transportation network when choosing a location.
151) A foreign trade zone is an area designated as economically disadvantaged in which
businesses get tax breaks on the investments they make within zone boundaries.
152) There are 256 foreign trade zones and 498 subzones, which are special foreign trade zones
that are established for limited purposes, operating in the United States.
153) A “business incubator” is a facility that offers low rental rates and permits startup small
businesses to share resources.
154) The primary reason for establishing a business incubator is to enhance economic
development in an area and to diversify the local economy.
155) Common sponsors of incubators include government agencies and colleges and universities.
156) Graduates from business incubators have a much higher success rate than the typical small
business.
157) Layout is the logical arrangement of the physical facilities in a business that contribute to
efficient operations, increased productivity, and higher sales.
158) A store’s external appearance plays only an insignificant role in identifying its “personality”
or image to customers.
159) Developing a layout plan really is not essential unless an entrepreneur is able to build a new
building to house the business.
160) Communicating the right image through layout and physical facilities is an important step
in attracting customers.
161) The rules of the Americans with Disabilities Act protecting customers are designed to
ensure that disabled customers have equal access to a company’s goods and services.
162) Any company with 15 or more employees and any buildings occupied after January 25,
1993, must comply with the Americans with Disabilities Act.
163) Studies show that complying with the Americans with Disabilities Act (ADA) requires
businesses to spend an average of almost $17,000 to bring their buildings up to ADA standards.
164) The Justice Department estimates that more than 20 percent of the cases customers have
filed under the Americans with Disabilities Act involved changes the business owners would
have made at no cost.
165) Most small companies that invest in making their locations accessible to all customers
under the Americans with Disabilities Act qualify for a tax deduction of up to $15,000.
166) In some cities and towns, local regulations impose restrictions on the size, location, height,
and construction materials used in business signs.
167) Signs are one of the most expensive and least effective ways of communicating with
customers available to small businesses.
168) Ergonomics, the science of adapting work and the work environment to complement
employees’ strengths and to suit customers’ needs, is an integral part of a successful layout.
169) When planning store, office, or plant layouts, business owners usually focus on minimizing
costs when what they should focus on is minimizing injuries and enhancing employees’
productivity.
170) Lighting is often an inexpensive investment for improving employee performance and the
overall appearance of the business.