Entrepreneurship and Effective Small Business Management, 11e, Global Edition
(Scarborough)
Chapter 18 Location, Layout, and Physical Facilities
1) The secret to selecting the ideal location for a business is:
A) the available labor pool for the business.
B) knowing the customer and what is convenient to them.
C) the tax rate of the local and state governments.
D) the security of the area and the services provided by the site to the business owner.
2) The first phase in determining where to locate a business is:
A) choosing what state the business owner wants to move to.
B) determining which city has the demographics that fit the business best.
C) conducting an Internet search for information on the cities of choice and competitors in those
cities.
D) determining what regions in the country have what the new business needs to succeed.
3) At the broadest level of the location decision, entrepreneurs usually identify regions of the
country that:
A) have many professional sports teams.
B) are experiencing substantial population growth.
C) contain many car drivers.
D) consist of the most employed inhabitants.
4) ________ is a useful Web site that gives entrepreneurs help in the location decision.
A) Consumer Reports
B) Index of Retail Saturation
C) ZoomProspector
D) Sales Conversion Index
5) A Geographic Information System (GIS):
A) is a software package combining the ability to draw detailed maps with the power to search
through databases.
B) records data not available through the census and includes eleven indicators of economic
growth.
C) contains the name of every street in the country and detailed block statistics for 345 urban
areas.
D) breaks down the population, retail sales, etc., by census region.
6) TIGER:
A) is a software package combining the ability to draw detailed maps with the power to search
through databases.
B) records data not available through the census and includes eleven indicators of economic
growth.
C) contains the names of every street in the country and detailed block statistics for 345 urban
areas.
D) breaks down the population, retail sales, etc. by census region.
7) When selecting a state in which to locate, one should consider:
A) the financing options available to the small business owner.
B) zoning laws.
C) the compatibility of the business with the community.
D) the proximity to one’s markets.
8) Carlos owns a heavy equipment repair and maintenance business. Which of the following
criteria for selecting a state in which to locate the business would be of greatest concern to
Carlos?
A) Labor supply
B) Proximity to markets
C) Tax laws and incentives
D) Proximity to raw materials
9) A small brick manufacturer would be concerned most with which location criterion?
A) Business climate
B) Labor supply needs
C) Wage rates
D) Proximity to markets
10) The ________ matches population demographics with lifestyle interests.
A) Rand McNally Commercial Atlas & Marketing Guide
B) Source Book of County Demographics
C) Lifestyle Market Analyst
D) Nielsen Media Guide
11) A glass manufacturer that requires an extremely pure, very fine type of sand in its production
process would be most concerned with which location criteria?
A) Business climate
B) Proximity to raw materials
C) Proximity to markets
D) Wage rates
12) When examining a state’s available labor force, the potential business owner needs to know:
A) the state’s labor relations history.
B) the demographics of the target customers.
C) both the number and education of the available workforce.
D) the proximity of its customers.
13) ________ would be most important to someone wishing to locate a manufacturing facility
for computers.
A) Proximity of the target market
B) Business climate
C) Labor supply
D) Proximity to raw materials
14) An interstate trucking firm would be most concerned with which selection criterion at the
state level?
A) Business climate
B) Proximity to markets
C) Proximity to raw materials
D) Wage rates
15) When selecting a city, an entrepreneur will need to factor into her decision:
A) the population density and growth trends.
B) the nature of competition.
C) the cost of the location.
D) All of the above
16) A telemarketing customer service unit for the credit card business of an interstate bank
would be most concerned about ________ in the choice of state.
A) proximity to markets
B) wage rates and labor supply
C) competition and business climate
D) population trends and competition
17) Which of the following characteristics for selecting a city would be of greatest interest to a
retail store selling fine china and collectibles?
A) Public services
B) Transportation
C) Zoning
D) Population trends
18) The index of retail saturation is:
A) retail expenditures times retail facilities divided by the number of customers.
B) the ratio of a trading area’s sales potential to its sales capacity.
C) a buying power index.
D) retail facilities times the number of customers divided by the retail expenditures.
19) ________ is a system that divides a county or a city into small cells or districts to control the
use of land, buildings, and sites.
A) An enterprise zone
B) Zoning
C) TIGER
D) A central business district
20) Which of the following sets of city factors does an entrepreneur need to consider when
choosing a location for his/her new business?
A) The business growth potential
B) Business climate and labor market
C) Proximity to the target market and raw materials
D) The availability of transportation, public services, and police and fire protection
21) A manufacturer would be most interested in which of the following criteria for the selection
of a city location for a new business?
A) Public services
B) Transportation
C) Reputation of the location
D) Compatibility with the community
22) A ________ is the traditional center of town.
A) hub
B) business area
C) central business district
D) community center
23) The area from which a small business expects to draw customers over a reasonable time span
is its:
A) trading area.
B) metropolitan statistical area.
C) enterprise zone.
D) incubator.
24) The primary variable(s) that influence(s) the scope of a trading area is (are):
A) the character of the transportation network.
B) the nature of competing businesses.
C) the type and size of the business operation.
D) the racial and political barriers in the local community.
25) Which of the following factors influences the size of a retail store’s trading area?
A) The location of competitors
B) The physical layout of the store
C) Zoning regulations
D) The nature of competing businesses
26) Shopping malls typically average ________ parking spaces per ________ square feet of
shopping space.
A) 10; 1,000
B) 5; 1,000
C) 15; 5,000
D) 3; 1,000
27) Mary’s successful clothing store was located on the back edge of the parking lot of a large
mall. She didn’t pay mall rents since she wasn’t part of the mall, but drew a lot of customers who
parked at the mall and then noticed her store. The mall developers built a movie theater on the
part of the parking lot directly in front of Mary’s store, basically hiding her from most mall
customers and her business dropped off so much she had to move. What retailer site selection
criterion forced Mary to move?
A) Proximity of competitors
B) Visibility
C) Adequate parking
D) Room for expansion
28) A central business district is:
A) the traditional center of town.
B) a plan that contains 12 to 50 stores and has a department store as a leading tenant.
C) a type of “mall” that has experienced 1500 percent growth over the last 5 years.
D) a shopping area that draws its customers primarily from the immediate local area.
29) Central business districts:
A) provide ample parking in front of the stores.
B) are characterized by one-stop shopping.
C) tend to have better prices and selection than malls do.
D) are experiencing a resurgence in popularity.
30) The ________ serves a large trading area (10 to 15 miles or more), contains from 50 to 100
stores, and has several major department stores as its anchors.
A) neighborhood shopping center
B) community shopping center
C) regional shopping mall
D) central business district
31) The type of business that does well when located near competitors is:
A) one that has a unique product line, dissimilar to that of its competitors.
B) one that sells high-priced products that customers comparison shop for.
C) one whose location is part of its trademark.
D) one located in an incubator.
32) Locating near ________ might be a key factor for success in businesses that sell goods that
customers compare on the basis of price, quality, color, and other factors.
A) customers
B) suppliers
C) competitors
D) employees
33) As the service economy has grown, a business location being used more and more by service
businesses is:
A) the industrial park.
B) home.
C) central business districts.
D) outlying areas.
34) Some cities develop ________ in cooperation with private industry for the benefit of
manufacturers.
A) incubators
B) central business districts
C) industrial parks
D) high visibility locations
35) Foreign trade zones were created in:
A) 2001.
B) 1992.
C) 1902.
D) 1934.
36) Incubator facilities are established in order to:
A) enhance economic development and diversify the local economy.
B) revitalize central business districts.
C) centralize types of businesses and provide tax breaks to those businesses.
D) encourage businesses to locate in economically depressed areas of a city.
37) To ensure that a building will accommodate expansion plans, a new business should:
A) plan space requirements for one to two years into the future and update the plans every six
months.
B) build, buy, or lease facilities that are 50–100% too big for their current operations.
C) buy or lease facilities that had the same type of business in them previously.
D) always build a new facility.
38) When evaluating existing buildings, retailers:
A) need to find the lowest cost per-square-foot possible due to the need for maximum display
space.
B) should locate in store space previously occupied by a similar type of business.
C) should recognize that the store’s appearance and layout create an image for the customer of
the business.
D) can discount the interior appearance of the building if it has a strong exterior appeal.
39) Entrances should invite entry. The way to accomplish this is to:
A) have large doors and attractive displays set back from the doorway that can lure customers
into the store.
B) offer discounts.
C) have displays as close to the entry of the store as possible.
D) have a big sign to attract customers.
40) The Americans with Disabilities Act of 1990 requires that:
A) businesses with more than 25 employees comply fully with the Act by June 1993.
B) all buildings be remodeled to accommodate any disabled customer or employee.
C) all businesses must accommodate all disabled customers or job candidates, regardless of the
cost.
D) buildings occupied after January 23, 1993 must be designed to accommodate disabled
customers and job candidates.
41) Signs are important to the small business owner because they:
A) grow in effectiveness the longer they are in place.
B) are easy to use and to change.
C) provide the maximum space for relatively complex messages.
D) are a medium that is not subject to regulation, thereby permitting maximum flexibility.
42) The science of adapting work and working conditions to complement employees and to suit
customers is called:
A) physiology.
B) ergonomics.
C) layout design.
D) kinesiology.
43) When planning store, office, or plant layouts, business owners too often focus on ________,
rather than enhancing employees’ productivity or maximizing sales.
A) construction schedules.
B) choosing an architect or designer.
C) minimizing costs.
D) None of the above
44) When evaluating the floors, walls, and ceilings in a retail store, the small business owner
should:
A) look for dark colored ceilings that both conserve energy and project a cool feeling.
B) strive for a light and bright interior.
C) look for bare functional walls that can be recovered at the owner’s expense.
D) emphasize function over attractiveness.
45) For retailers, lighting:
A) is used to attract customers to a specific display.
B) is an expensive investment.
C) has little impact on the overall appearance of the business.
D) requires the same considerations as for manufacturers.
46) The best way to determine where to place merchandise, what a store’s “hot” and “cold” spots
are, is to:
A) conduct a kinesiology study.
B) hire a market research firm to study your business.
C) conduct focus groups with former customers.
D) simply observe customers in the store.
47) A(n) ________ layout arranges displays in a rectangular fashion with parallel aisles. It is a
formal layout that controls the traffic flow through the store.
A) free-form
B) grid
C) angled
D) boutique
48) The typical grocery store uses a(n) ________ layout.
A) grid
B) free-form
C) boutique
D) arcade
49) A(n) ________ layout has the advantage of creating a relaxed, friendly shopping atmosphere
encouraging shoppers to linger and increasing the number of impulse purchases.
A) free-form
B) grid
C) angled
D) boutique
50) A(n) ________ layout divides a store into a series of individual shopping areas, each with its
own theme. This layout can create a distinctive image for a business.
A) free-form
B) grid
C) angled
D) boutique
51) The boutique layout is commonly used in:
A) supermarkets.
B) self-service stores.
C) small department stores.
D) stores with a high number of impulse goods.
52) Manufacturing layout decisions take into consideration:
A) customer buying behavior, the types of product sold, and the physical dimensions of the
building.
B) the product, the process, the facility, and key economic considerations.
C) the status of the building; built, bought, or leased and the type of product sold.
D) the employees, the customer, and the mechanical process used to produce the product.