Test Bank Docx Chapter.12 Small Business Marketing Location - Small Business Competitive Advantage 7e Test Bank by Timothy S. Hatten. DOCX document preview.
Test Bank
Chapter 12: Small Business Marketing: Location
Multiple Choice
1. The series of intermediaries a product passes through when going from producer to supplier is known as ______.
a. direct channels
b. distribution channels
c. warehousing
d. shelf life
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
2. Of the Four P’s of the marketing, ______ is especially significant for business because an effective distribution system can make or save a small business.
a. Product
b. Place
c. Price
d. Promotion
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
3. Through a/an ______ distribution channel, products pass through various intermediaries before reaching the consumer.
a. direct
b. linear
c. indirect
d. nonlinear
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
4. Sandra visits the local farmer’s market every Friday during the summer, where she picks up fresh produce that was grown by the same farmers who are there to sell the goods. The farmer’s market where Sandra likes to shop illustrates what type of distribution channel?
a. direct
b. closed system
c. indirect
d. nonlinear
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
5. The use of two or more channels to distribute the same product to the same target market is referred to as ______.
a. direct channel distribution
b. indirect channel distribution
c. multipurpose distribution
d. dual distribution
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
6. ______ cause the product to go directly from producers to consumers.
a. Direct channels
b. Indirect channels
c. Distribution channels
d. Streamline channels
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
7. Which of the following represents clients who buy or sell specialized goods or seasonal products and do not take title to the goods sold?
a. agents
b. brokers
c. wholesalers
d. retailers
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
8. Of the options listed, the most important decision that a small business owner makes is the choice of ______.
a. the hours to be open
b. the location of the business
c. the decor of the building
d. the paint color for the walls
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
9. The key word in evaluating a channel of distribution is ______.
a. location
b. plastics
c. competition
d. efficiency
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
10. You can do away with distribution intermediaries, but you cannot do away with their ______.
a. transportation
b. channel
c. profit
d. function
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
11. An intermediary who brings buyers and sellers together and facilitates the exchange is known as a/an ______.
a. wholesaler
b. broker
c. agent
d. retailer
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
12. Wytt Foods Inc. buys food products in bulk from various producers and resells them to foodservice businesses across the region. Wytt Foods can best be described as a/an ______.
a. wholesaler
b. manufacturer
c. agent
d. retailer
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
13. A small business owner should begin the site selection process by asking which of the following questions?
a. What region would be best?
b. What state within the region would be best?
c. What city within that region would be best?
d. What specific site within that city will work for the business?
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
14. Which of the following questions is the last question that should be asked when determining the best location for a business?
a. What region would be best?
b. What state within the region would be best?
c. What city within that region would be best?
d. What specific site within that city will work for the business?
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
15. The following criteria are essential to analyze when evaluating a potential ______ for a business: price and availability of land and water, the labor pool, access to customers, and proximity of suppliers.
a. target market
b. location
c. trademark
d. brand name
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
16. The United States is a collection of ______ markets rather than one big market.
a. local
b. regional
c. local and regional
d. national
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
17. Neighborhoods are typically comprised of people who are ______.
a. very similar
b. very different
c. a mixture of types of people
d. different in their religious beliefs
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
18. A database that distinguishes differing neighborhood types by accurate geodemographic segmentation is known as ______.
a. Neighborhood Type Inventory
b. Potential Rating Index for Zip Marketers
c. Geodemographic Database System
d. Neighborhood Segmentation Database
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
19. Types of sites, accessibility, legal considerations, and economic factors are all issues to address when choosing ______.
a. a potential product
b. a potential advertising campaign
c. a potential management team
d. a potential business location
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
20. Road patterns and condition, obstructive barriers, site visibility, traffic flow, and parking convenience are all questions to address when looking at ______ in site selection.
a. legal considerations
b. economic factors
c. type of site
d. accessibility
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
21. William has determined that he needs to expand parking at his bookstore, so he decides to purchase the empty lot across the street. This constitutes which site location consideration?
a. economic factors
b. type of site
c. legal considerations
d. accessibility
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
22. Robert is opening a new bar and grill, and he is currently negotiating with the city’s liquor board to obtain a liquor license before he can open. This constitutes which site location consideration?
a. economic factors
b. type of site
c. legal considerations
d. accessibility
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
23. Occupancy costs, the cost of amenities, and all one-time costs and leasehold improvements are all questions to address when looking at ______ in site selection.
a. legal considerations
b. economic factors
c. type of site
d. accessibility
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
24. The number of ______ and ______ passing a site strongly affects its potential retail sales.
a. cars; people
b. tour busses; people
c. cars; tour busses
d. policemen; people
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
25. Auto dealerships are often located close together because ______.
a. they can share lot expenses
b. they can share salespeople
c. it is easier for customers to comparison shop
d. they can keep close watch on the competition
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
26. ______ involves restoring old buildings or replacing them with new offices, retail shops, or housing.
a. Gentrification
b. Site selection
c. Diversification
d. Displacement
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
27. Service and retail businesses have three basic choices for types of locations; central business districts, shopping centers, and ______.
a. main street areas
b. manufacturing areas
c. suburban areas
d. stand-alone locations
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
28. The central business district is usually the ______ section of town.
a. newest
b. most expensive
c. oldest
d. safest
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
29. Denver’s Larimer Square and Chicago’s Water Tower Place are examples of ______.
a. the gentrification process
b. urban blight
c. areas with high crime rates
d. areas with old, dilapidated buildings
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
30. Which of the following locations should a small business owner choose when comparing locations for an upscale gift shop?
a. the central business district
b. the central manufacturing area
c. a small shopping center in an exclusive neighborhood
d. the one large shopping mall in a large town
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
31. Disadvantages such as little parking availability, traffic congestion, older buildings, and neighborhood disparity are found in which location type?
a. central business districts
b. shopping centers
c. stand-alone locations
d. suburban areas
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
32. A large retail store that attracts people to shop at malls is known as ______.
a. Walmart
b. an anchor store
c. the main attraction
d. the primary store
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
33. Advantages such as heavy traffic due to the variety of products available, cost sharing, ample parking, and a lower crime rate are found in which location type?
a. central business districts
b. shopping centers
c. stand-alone locations
d. suburban areas
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
34. The inflexibility of store hours is a major disadvantage of which location type?
a. central business districts
b. shopping centers
c. stand-alone locations
d. suburban areas
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
35. Little competition, more parking, and less rent are advantages of which of the following location sites?
a. central business districts
b. shopping centers
c. stand-alone locations
d. suburban areas
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
36. According to the text, if the business is a health club, convenience store, or a wholesale club, which may be the best location site choice?
a. central business districts
b. shopping centers
c. stand-alone locations
d. suburban areas
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
37. With service businesses that visit the customer such as plumbers, carpet cleaners, and landscapers, location is ______.
a. not as critical
b. just as critical
c. more critical
d. unimportant
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
38. A type of business location that exists to assist startups by providing lower than market rent and shared services and equipment is called a/an ______.
a. incubator
b. henhouse
c. hothouse
d. percolator
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
39. The major advantage of an incubator is ______.
a. lower than market rent
b. professional assistance
c. networking
d. financing
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
40. For destination-oriented products such as health clubs, convenience stores, or wholesale clubs, what location type would work best?
a. incubator
b. stand-alone location
c. mall center
d. central business district
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
41. The SLU Data Processing Center is located on university property, where it leases the location space for lower-than-market rent. The university also provides office supplies and equipment at a discounted rate. SLU is most likely situated in what type of business location?
a. incubator
b. stand-alone location
c. shopping center
d. central business district
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
42. Incubators can easily put a new businessperson in contact with other local businesses. This is known as ______.
a. professional assistance
b. factoring
c. networking
d. outsourcing
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
43. How your location is laid out and designed is important because it affects the ______ and ______ of your business.
a. profit; loss
b. profit; expenses
c. image; productivity
d. activity; customer base
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
44. Which of the following layouts encourages customers to browse?
a. free-flow layout
b. grid layout
c. loop layout
d. free-style layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
45. Supermarkets and drugstores tend to use which of the following layouts because it suits customers who wish to shop the entire store by moving up and down alternate aisles?
a. free-flow layout
b. grid layout
c. loop layout
d. process layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
46. A type of retail layout with a predominant aisle running through the store that quickly leads customers to their desired departments is known as ______.
a. free-flow layout
b. grid layout
c. loop layout
d. process layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
47. Carla owns an upscale hat shop, and she recently moved her shop to the city’s central business district. In contemplating the layout of the shop’s interior, Carla has determined that she would like a layout that encourages browsing. Which layout style should she choose?
a. process layout
b. loop layout
c. free-flow layout
d. grid layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
48. A way to arrange a manufacturing business by placing all comparable equipment together in the same area is a ______.
a. process layout
b. product layout
c. fixed layout
d. mobile layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
49. Auto assembly lines and textile mills where raw materials enter one end of the line and finished products exit the other are examples of which layout?
a. process layout
b. product layout
c. fixed layout
d. mobile layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
50. A disadvantage of the ______ layout is that when equipment is grouped together, increased handling is needed to move the product from one station to another when more than one task is performed.
a. service
b. fixed
c. product
d. process
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
51. Barbara works at a business location where she has a great deal of independence, enjoys very low overhead expenses, and has no commute time. Barbara’s business is located at ______.
a. a shopping center
b. a central business district
c. a home office
d. an anchor store
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
52. A long-term agreement to rent a building, equipment, or other assets is known as ______.
a. a lease
b. a rental contract
c. a legally liable contract
d. a business contract
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
53. The biggest advantage of leasing is the ______ that is made available for other purposes.
a. time
b. cash
c. expenses
d. effort and energy
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
54. If you sign a triple net lease, you are agreeing to pay a base monthly rent plus ______.
a. three times fair market value
b. an extra amount every three months
c. real estate taxes, insurance, and operating expenses of the building
d. nothing else
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
55. Changes that make a property more valuable, such as painting, adding shelves, or new lighting are known as ______.
a. leasehold improvements
b. capital improvements
c. asset improvements
d. deductible expenses
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
56. Chuck pays a lease for his centrally located software shop. He pays the same amount to lease the building each month, but his landlord covers the operating expenses such as taxes, insurance, and repairs. Chuck’s lease can best be described as a ______.
a. gross lease
b. net lease
c. net-net lease
d. triple-net lease
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
57. A lease in which the tenant pays a base monthly rent plus real estate taxes and insurance on the building is referred to as a ______.
a. gross lease
b. net lease
c. net-net lease
d. triple-net lease
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
58. A lease that varies according to the amount of inflation in the economy is referred to as a/an ______.
a. percentage lease
b. escalation lease
c. gross lease
d. triple-net lease
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
NARRBEGIN: 12-1
Scenario 12-1. Molli is beginning her new manufacturing business where she is producing computer desks. She has picked a site for her new business and is now concerned with the layout in order to provide a smooth flow for the work. Her competitive advantage has been identified as the quality of the desks that she will produce. Flexibility to change the design and low costs are also considerations in the profitability of the business.
NAREEND
59. In Scenario 12-1, Molli realizes that the market for furniture is constantly changing. One of the features she wants to ensure in her layout is flexibility so that the product can be changed to meet consumer demand. Which type of layout would enable her to do this?
a. process layout
b. loop layout
c. grid layout
d. product layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-1
60. In Scenario 12-1, based on the above criteria, which of the following would be the best choice for the layout of Molli’s manufacturing business?
a. process layout
b. loop layout
c. grid layout
d. product layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-1
61. In Scenario 12-1, as with any small business owner, Molli needs to keep costs as low as possible. Which layout would enable her to decrease material handling costs?
a. process layout
b. loop layout
c. grid layout
d. product layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-1
62. In Scenario 12-1, quality is a major advantage that Molli would like to work into her manufacturing design. The likelihood of building the desks with dents or scratches increases each time they are moved from one location to another. Which type of layout would minimize the number of times the desk pieces would be moved?
a. process layout
b. loop layout
c. fixed layout
d. product layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-1
63. In Scenario 12-1, which type of layout is usually more expensive due to the specialized equipment that is needed, which also increases the likelihood of the whole line shutting down if there is a breakdown anywhere along the line?
a. process layout
b. loop layout
c. fixed layout
d. product layout
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-1
NARRBEGIN: 12-2
Scenario 12-2. Kathy’s Craft Cubby is beginning the process of deciding on a location. The craft store will sell small handmade wooden crafts by many local artisans. Kathy is excited about managing this new enterprise since she will be the primary supplier of the crafts that will be sold. She realizes that location is a very important consideration. Her crafts will range in the medium to expensive price range since they are high quality and unique. Kathy’s claim is that there will never be a duplicate made of any of her creations.
NARREND
64. In Scenario 12-2, Kathy is considering a ______ as a location. However, here parking would be difficult to find and very expensive along with a possible high crime rate.
a. central business district
b. shopping center
c. stand-alone location
d. franchise
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-2
65. In Scenario 12-2, Kathy realizes much of her store traffic may need to come from anchor stores and that a visit to her shop may be secondary on her customers’ lists. This would be which of the following location types?
a. central business district
b. shopping center
c. stand-alone location
d. franchise
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-2
66. In Scenario 12-2, Kathy would like to open her store during hours that are convenient for her. Owing to her personal life, having the store open in the evenings would be difficult. This would make which of the following locations difficult to use?
a. central business district
b. shopping center
c. stand-alone location
d. franchise
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR 12-2
67. In Scenario 12-2, Kathy feels that her competitive advantage will be very clear to her customers in a short time period. Her unique merchandise will soon draw in a loyal customer base. If this is true, which of the following locations may work for her?
a. central business district
b. shopping center
c. stand-alone location
d. franchise
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-2
68. In Scenario 12-2, based upon the above information, which location type would work best for Kathy’s business?
a. central business district
b. shopping center
c. stand-alone location
d. franchise
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Reflective thinking
NAR: 12-2
True/False
1. The choice for distribution channel becomes less significant when entering international markets.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
2. Intermediaries include agents, brokers, wholesalers, and retailers.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
3. An intermediary who sells products to the ultimate consumer is referred to as a broker.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
4. Adding intermediaries to the distribution channel usually increases the cost to the consumer.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
5. It is possible to eliminate the middleman intermediaries and the functions they perform.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
6. Selecting a location for a business is one of the most important decisions made by a small business owner.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
7. People will go out of their way to find a business.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
8. Neither brokers nor agents take title, or ownership, to the goods sold.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
9. Cities that provide stable housing markets and low crime rates also see the strongest economic growth.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
10. The economic condition of a city, state, or region can be much different than the national economic condition.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
11. Since the SCI is difficult to calculate, business consultants must be hired to figure the index and interpret the data.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
12. Neighborhoods tend to have residents that are very different.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
13. The volume of automobile and foot traffic, the speed of vehicles, and the presence of turning lanes and parking areas are important factors to consider when choosing a location for a business.
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
14. The type of traffic passing a business is just as important as the volume of traffic that is passing the business.
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
15. A disadvantage of locating in a central business district is that it is expensive and hard to obtain parking.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
16. A disadvantage of locating a business in a shopping center is the inflexibility of the hours that the business must be open.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
17. Anchor stores are small retail shops located within large department stores that draw people to the store.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
18. For service businesses that visit the customer (like plumbers and landscapers), location becomes even more critical than for other service businesses.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
19. If a small business owner chooses a stand-alone location, the competitive advantage of the business must be very clear.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
20. An incubator offers support services and equipment, professional assistance, and networking to new small businesses.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
21. Before a site is selected, a business owner must first lay out the interior of the business.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
22. If a service business is visited by the customer, location is not critical. The customer will find the business.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
23. The Americans with Disabilities Act (ADA) of 1990 requires businesses to be accessible to disabled customers and employees.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
24. Small manufacturers use the process layout primarily due to its flexibility.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
25. In a process layout, the product stays in one spot, and equipment, materials, and labor are brought to the product.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
26. A restaurant that makes items like bagels, pizzas, or cookies could use a fixed layout design very efficiently.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Reflective thinking
27. Aircraft and shipbuilders use the process layout in order to manufacture their product.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
28. A product layout is inflexible because it is costly and difficult to change the product that is being made.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
29. A disadvantage of a lease agreement is that it may prevent a business owners from altering a building to fit the business’s needs.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
30. The biggest advantage of leasing is the property tax that the lessee does not have to pay.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
31. A lease in which the tenant pays a base monthly rent plus some or all real estate taxes of the building is called a gross lease.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
32. Lease payments are deductible business expenses, while if a building is owned, only depreciation is deductible for tax purposes.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
33. The recognition clause in a lease allows landlords to adjust rent according to the consumer price index or some other economic scale.
KEY: Learning Objective: 12.6: Present the circumstances under which leasing, buying, or building is an appropriate choice.
REF: Cognitive Domain: Knowledge
Answer Location: Concept Module 12.6: Lease, Buy, Or Build?
Difficulty Level: Easy
TOP: AACSB Standard: Analytical thinking
Short Answer
1. Describe the three primary types of distribution channels.
KEY: Learning Objective: 12.1: Describe small business distribution and explain how “efficiencies” affect channels of distribution.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.1: Small Business Distribution
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
2. Describe three critical factors when deciding upon the location for a new business.
KEY: Learning Objective: 12.2: Explain how the location of your business can provide a competitive advantage.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.2: Location For The Long Run
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
3. List and describe at least three broad categories of site questions when locating a business.
KEY: Learning Objective: 12.3: Discuss the central issues in choosing a particular site within a city.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.3: Site Selection
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
4. Compare and contrast the three basic types of locations for businesses.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
5. Describe incubators and explain the benefits of an incubator for a small business owner.
KEY: Learning Objective: 12.4: Compare the three basic types of locations.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.4: Location Types
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
6. Compare and contrast a grid layout and a loop layout.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
7. Compare and contrast the process layout and the product layout.
KEY: Learning Objective: 12.5: Explain the types of layout you can choose.
REF: Cognitive Domain: Comprehension
Answer Location: Concept Module 12.5: Layout and Design
Difficulty Level: Medium
TOP: AACSB Standard: Analytical thinking
Document Information
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