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The checkout process is particularly important, as shoppers tend to be impatient and only
willing to wait about four minutes before becoming exasperated. Some retailers use
roving clerks equipped with handheld credit card-swiping devises during peak hours to
hasten the checkout process. Refer to Figure 14.6, Space Values for a Small Store.
Layout for Manufacturers.
including:
Type of product
Type of production process
Ergonomic consideration
Economic considerations
the sequence of operations performed on a product.
Process layout is an arrangement of workers and equipment according to the
general function they perform, without regard to any particular product or
customer.
Fixed position layout is an arrangement in which materials do not move down a
Transportation
Inventory
Motion
Waiting
Overproduction
Copyright © 2019 Pearson Education, Inc.
Chapter 14, Page 230
Defects
Manufacturers can lower materials handling costs by implementing 21 principles that are
hallmarks of a lean and efficient manufacturing. Refer to pages 602-603.
Conclusion
The location decision is one of the most important decisions an entrepreneur will make.
For retailers and service based businesses, the location decision is especially crucial to
accommodate the needs of their walk-in customers.
Manufacturer’s needs introduce another set of criteria. Local zoning ordinances in concert
with the logistic needs of manufacturing businesses are some of the most important
considerations.
When evaluating the suitability of a particular building to meet the needs of the business,
an entrepreneur should carefully consider factors such as: size, construction and external
appearance, entrances, legal issues including American Disabilities Act considerations,
signage, and interior elements including sight, sound, scent and lighting.
Meeting these needs may require making concessions, but all are important considerations.
Part 3: Chapter Exercises
You Be the Consultant: “Temporary Locations Can Be
1. What advantages and disadvantages do pop-up stores such as the ones described
here offer entrepreneurs? (LO 1) (AACSB: Analytical thinking)
Advantages of pop-up stores include:
2. What types of businesses would be successful opening pop-up stores temporarily
on your campus or on a nearby campus? What advice would you offer
entrepreneurs who are considering opening the store? When should it open and for
how long? (LO 1) (AACSB: Application of knowledge)
Students should be encouraged to come up with ideas that best suit their campus
3. Would pop-up stores be successful in your community? Explain. Work with a
team of your classmates to identify three products or product lines That would be
successful in your community if they were sold from a pop-up store. (LO 1)
(AACSB: Application of knowledge)
Expect students to appreciate the value market research will offer to respond to this
You Be the Consultant: “Where Should Our Next
Retail Store Be Located?”
1. What process should Bi use to identify the best cities for Blank Label ‘s retail
expansion plans? How might the company use its database of information on its
existing online and retail store customers in the location decision? (LO 2)
(AACSB: Reflective thinking)
Blank Label is a retail store. The chapter identifies several criteria that retail stores should
2. What criteria should Bi use to evaluate prospective cities? (LO 2) (AACSB:
Application of knowledge)
3. Do you agree with Bi’s idea of using temporary pop-up shops in certain cities to
test their market potential for Blank Label’s custom-made clothing line? Explain.
What are the advantages and disadvantages of this technique? (LO 2) (AACSB:
Application of knowledge)
As the previous boxed feature points out, pop-up stores offer a number of advantages as
4. Use the resources of the Internet to identify cities that Bi should consider for
Blank Label’s next retail store and explain why you choose them. (LO 2) (AACSB:
Application of knowledge)
Part 4: Chapter Discussion Questions
14-1. Buzz Price, the location expert who helped Disney and other entrepreneurs
find the ideal locations for their businesses, described the location decision in the
following way: “Guessing is dysfunctional. Using valid numbers to project
performance is rational.” How can entrepreneurs find “valid numbers” to help them
project the performance of their businesses in different locations? (LO 2) (AACSB:
Reflective thinking)
Conducting thorough market research and taking an objective view of each location
14-2. What factors should a manager consider when evaluating a region in which
to locate a business? Where are such data available? (LO 2) (AACSB: Reflective
thinking)
14-3. Outline the factors important when selecting a state in which to locate a
business. (LO 1) (AACSB: Reflective thinking)
Copyright © 2019 Pearson Education, Inc.
Chapter 14, Page 233
Labor
Taxes
Laws
Business climate
Population trends
Competition
Transportation
14-4. What factors should a seafood processing plant, a beauty shop, and an
exclusive jewelry store consider in choosing a location? List factors for each type of
business. (LO 2) (AACSB: Reflective thinking)
14-5. What intangible factors might enter into the entrepreneur’s location
decision? (LO 3) (AACSB: Reflective thinking)
Intangible factors that might be valuable for the entrepreneur to consider include:
14-6. What are zoning laws? How do they affect the location decision? (LO 3)
(AACSB: Reflective thinking)
14-7. What is the trade area? What determines a small retailer’s trade area?
(LO 3) (AACSB: Reflective thinking)
Copyright © 2019 Pearson Education, Inc.
Chapter 14, Page 234
Trading areas are regions from which a business can expect to draw customers. Variables
include the scope of the trading area, customer preferences, and the type and size of the
operation.
14-8. Why is it important to discover more than just the number of passersby in a
traffic count for a potential location? (LO 3) (AACSB: Reflective thinking)
14-9. What types of information can the entrepreneur collect from census data?
(LO 3) (AACSB: Reflective thinking)
Census data provides detailed population, demographic, and economic information. This
14-10. Why may a “cheap location” not be the “best location”? (LO 3) (AACSB:
Analytical thinking)
14-11. What is a foreign trade zone? A business incubator? What advantages and
disadvantages does each one offer a small business locating there? (LO 3) (AACSB:
Reflective thinking)
A foreign trade zone is a specifically designated area where international trade occurs with
14-12. Why is it costly for a small firm to choose a location that is too small? (LO 3)
(AACSB: Reflective thinking)
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Chapter 14, Page 235
Locations that are too small may lead to costly renovations and/or relocation to meet the
growth and transition needs of a successful business.
14-13. What function does a small company’s sign serve? What are the
characteristics of an effective business sign? (LO 3) (AACSB: Reflective thinking)
14-14. What is ergonomics? Why should entrepreneurs apply the principles of
ergonomics in the design of their facilities? (LO 5) (AACSB: Reflective thinking)
14-15. Explain the statement, “Not every portion of a small store’s interior space is
of equal value in generating sales revenue.” What areas are most valuable? (LO 6)
14-16. What are some of the features that determine a good manufacturing layout?
(LO 6) (AACSB: Reflective thinking)
Creating and maintaining an efficient workflow are of utmost concern to manufacturing
firms. Important factors to consider in manufacturing layouts are:
Type of product
Copyright © 2019 Pearson Education, Inc.
Chapter 14, Page 236
Inventory
Motion
Waiting
Overproduction
Processing
Defects
In addition, manufacturers can lower materials handling costs by implementing 21
principles that are hallmarks of a lean and efficient manufacturing.
Part 5: Case Study
Case 1: United Apparel Liquidators
Part 6: Online Videos and Podcasts
Search these sites for key entrepreneurial terms from this chapter for additional resources
with new videos and podcasts posted regularly. You may also consider searching “retail
store layout” and other related chapter terms.
How to Choose a Location for a Store or Restaurant 8:43 minutes
http://www.youtube.com/watch?v=T1dg_KAy3tI
How Retail Layout Affects Profit 5:04 minutes
http://www.youtube.com/watch?v=K_VEKoLcNh8
How to Make Soap: Factory Production 4:57 minutes
http://www.youtube.com/watch?v=k1rsfZ_WGm4
CNN Money.com – Small Business Video
http://money.cnn.com/video/smallbusiness/
Spacecubed: Coworking, Collaborating and Innovation Space 2:08 minutes
http://www.youtube.com/watch?v=8EpCGYDuyMY
Building the Boeing 777 on a New Moving Production Line 2:45 minutes
http://www.youtube.com/watch?v=kQmqNOuRzb0
Links to additional online resources are available on the companion Web site at
