Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Entrepreneurship, 3e (Bamford)
Chapter 12 Establishing Operations
1) A root cause of many of the problems in a new business can be traced to the lack of development
or implementation of its operational plan.
2) Efficient use of time is imperative for a new business owner.
3) When developing a critical path chart, assigning responsibilities and estimated time of tasks is
considered to be an intellectual activity.
4) The purpose of a critical path chart is to be a formal document for a business plan.
5) The founders of a business setting a schedule allows them to get a solid handle on how soon they
can begin operations.
6) Underestimating the amount of time it will take to begin operations is a mistake that harms
many new business owners.
7) The chart of how actions fit together is a critical path chart that shows the set of activities that
are dependent on each other and that take the longest time.
8) A critical path chart allows an owner to understand which activities can occur concurrently and
which ones must be in place before the next activity can occur.
9) In marketing, the old axiom of location, location, and location is the key to business success.
10) A mall shopping center is a retail center that occupies a small area of land along a major street.
11) Commercial real estate firms are a major source of information for a new business owner who
is trying to decide where to locate the business.
12) A strip center generally has anchor stores to draw in customers.
13) Picking which bank to work with is a very simple and easy decision for a small business owner
as all banks are capable of working with small businesses and want their business.
14) Financing the initial operations begins with a variety of initial payments and the process of
setting up a business and ends with the first completed sale.
15) Legitimacy is a term used by financial institutions interacting with new businesses, which
indicates there are questionable areas of concern.
16) Developing the perception of legitimacy for both customers and suppliers is very easy, and it
does not affect the long-term survival of a business.
17) The perception of looking like and acting like a successful company can help a new small
business build legitimacy.
18) Regardless of the business location, an entrepreneur needs to consider the potential means with
which to establish the legitimacy of a business in the eyes of the customers and suppliers.
19) Legitimacy is the acceptance by key stakeholders such as customers and suppliers that you are
a genuine business that will still be in operation next year.
20) A production management system is an important step to accomplish in the later stages of a
new business start-up.
21) A production system developed ad hoc for an operation is expensive and results in many lost
opportunities.
22) The importance of a production managements system is exaggerated during the harvest period
of a business, as the firm has unlimited resources and a strong customer base.
23) All businesses have a production management system, whether the system is put in writing or
not.
24) A production management system helps employees to focus their energy on the expected
routine aspects of the job because it takes care of the unusual aspects.
25) A production chart details each step that must occur within a firm's production process.
26) A production chart is different from a critical path chart in that it focuses on the founding of a
business.
27) One example of a production chart could be a chef making a meal and having everything done
at the same time.
28) In order to be successful, new business owners should establish a production management
system from scratch even if the business is part of an established industry.
29) Dr. W. Edwards Deming is considered the father of the quality movement in the United States.
30) Quality is an assumed standard to be achieved in any business.
31) Dr. W. Edwards Deming insists a business should be guided by the behavioral approach of
management.
32) Dr. W. Edwards Deming suggested that using the scientific method of quality, a firm should
change lots of things at the same time rather than changing only one thing at a time.
33) Firms should focus on strategic alliances, where firms join together to form long-term
relationships for the benefit of both companies.
34) A competitor's actions may change the opening date of a new business.
35) When practicing time management, an entrepreneur should focus on long-term items that are
critical and give them more priority.
36) Prioritizing tasks is a critical aspect of time management.
37) An owner who does not set ________ and ________ risks the possibility of losing funds and
valuable resources.
A) timetables; objectives
B) goals; responsibilities
C) goals; objectives
D) timetables; responsibilities
38) A(n) ________ demonstrates how a set of activities are dependent on each other and which
activities take the longest time.
A) critical path chart
B) pro forma chart
C) activity-setting chart
D) production pie chart
39) A new businessperson should be guided by developing a ________ that provides the most
assistance and information.
A) main path analysis
B) production management system
C) critical path chart
D) line analysis
40) A critical path chart should be updated ________ as entrepreneurs develop the plan for a
business.
A) every other month
B) at the end of every quarter
C) yearly
D) constantly
41) Which of the following statements is true of critical path analysis developed by entrepreneurs?
A) Entrepreneurs should not update their critical path analysis once the plan for a business is set.
B) Entrepreneurs should not share their critical path analysis with potential suppliers and industry
experts.
C) Entrepreneurs should modify the critical path analysis during the process of actually
accomplishing the tasks.
D) Entrepreneurs should treat the critical path analysis as a formal document for a business plan.
42) The critical chart process for an Internet-based business is ________ for a manufacturing
business.
A) more complex than
B) the same as that
C) somewhat simpler than
D) none of these
43) A small retail center located along a major road is called a(n) ________.
A) industry center
B) shopping mall
C) anchor stores
D) strip shopping center
44) Locations can be evaluated by
A) the lease.
B) the amount of rent.
C) the amount of traffic that they draw.
D) the quality of the facility.
45) According to the book, ________ is(are) a source of valuable information for new business
owners trying to choose a location for their business.
A) incubators
B) a small business center
C) commercial real estate firms
D) the Chamber of Commerce
46) A financial consideration in choosing a location for a new business owner is(are)
A) security deposit.
B) initial supplies.
C) licenses and inspections.
D) all of these.
47) Which of the following is an example of initial payments that a new small business has to
make?
A) Bank set-up fees
B) Initial advertising expenses
C) Security deposits
D) all of these
48) It is recommended that no one individual should be able to write checks for a business in
excess of ________ without a countersignature.
A) $1000
B) $5000
C) $100
D) $500
49) ________ is the acceptance by key stakeholders that you are a genuine business that will still
be in operation next year.
A) Efficiency
B) Applicability
C) Legitimacy
D) Generalizability
