Deck 12: Establishing Operations

Question 1

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.

Answer 1

False

Question 2

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.

Answer 2

True

Question 3

Efficient use of time is imperative for a new business owner.

Answer 3

True

Question 4

Underestimating the amount of time it will take to begin operations is a mistake that harms many new business owners.

Question 5

A production management system is an important step to accomplish in the later stages of a new business start-up.

Question 6

Legitimacy is a term used by financial institutions interacting with new businesses, which indicates there are questionable areas of concern.

Question 7

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.

Question 8

The founders of a business setting a schedule allows them to get a solid handle on how soon they can begin operations.

Question 9

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.

Question 10

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.

Question 11

The perception of looking like and acting like a successful company can help a new small business build legitimacy.

Question 12

The purpose of a critical path chart is to be a formal document for a business plan.

Question 13

In marketing, the old axiom of location, location, and location is the key to business success.

Question 14

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.

Question 15

When developing a critical path chart, assigning responsibilities and estimated time of tasks is considered to be an intellectual activity.

Question 16

A mall shopping center is a retail center that occupies a small area of land along a major street.

Question 17

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.

Question 18

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.

Question 19

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.

Question 20

A strip center generally has anchor stores to draw in customers.

Question 21

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

Question 22

Prioritizing tasks is a critical aspect of time management.

Question 23

All businesses have a production management system, whether the system is put in writing or not.

Question 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.

Question 25

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.

Question 26

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

Question 27

A production system developed ad hoc for an operation is expensive and results in many lost opportunities.

Question 28

A competitor's actions may change the opening date of a new business.

Question 29

When practicing time management, an entrepreneur should focus on long-term items that are critical and give them more priority.

Question 30

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

Question 31

Quality is an assumed standard to be achieved in any business.

Question 32

Dr.W.Edwards Deming is considered the father of the quality movement in the United States.

Question 33

Firms should focus on strategic alliances, where firms join together to form long-term relationships for the benefit of both companies.

Question 34

A production chart is different from a critical path chart in that it focuses on the founding of a business.

Question 35

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.

Question 36

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.

Question 37

One example of a production chart could be a chef making a meal and having everything done at the same time.

Question 38

Dr.W.Edwards Deming insists a business should be guided by the behavioral approach of management.

Question 39

A production chart details each step that must occur within a firm's production process.

Question 40

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

Question 41

Which of the following have well-established methods of operation?

A)Franchises
B)New start-up firms
C)Bankrupt firms
D)All of these

Question 42

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.

Question 43

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.

Question 44

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

Question 45

Why is the importance of a production management system exaggerated in the early stages of a new business?

A)There are customers who are ready to pay exorbitant price for a newly launched product.
B)The firm has only limited resources and strong time pressures to perform well at the outset.
C)There are a number of suppliers who are ready to supply raw materials for a credit.
D)The firm has to pay very high interest rate to banks and other financial institutions.

Question 46

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

Question 47

Which of the following gives a detailed understanding about a firm's method of operation and its sequence?

A)A production chart
B)A main path analysis diagram
C)A production management system
D)A directed acyclic graph

Question 48

Delicious Donuts Store has been making and distributing donuts for the past 4 years from the same location.It also maintains a good payment record.However, due to some bad operational decisions, it is now facing cash crunch.Nevertheless, the suppliers are ready to supply material for a credit period of 120 days.Which of the following terms is the most probable reason behind the trust that suppliers have on Delicious Donuts Store?

A)Efficiency
B)Transparency
C)Elasticity
D)Legitimacy

Question 49

All of these are items that establish legitimacy EXCEPT

A)a professional business card.
B)a high-quality Web page.
C)a land line.
D)a bank line of credit.

Question 50

Which of the following terms is used by key stakeholders for acceptance of a company as a reputable ongoing business?

A)Positive cooperation
B)Legitimacy
C)Acceptance contract
D)Dual compact

Question 51

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

Question 52

What percentage of businesses have a production process?

A)25
B)50
C)75
D)100

Question 53

A production chart is similar to a

A)analysis chart.
B)critical path chart.
C)deficit gap chart.
D)pro forma chart.

Question 54

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

Question 55

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.

Question 56

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

Question 57

Which of the following is true of the effects of business incubators in establishing a business operation?

A)They are a potential setting for new businesses, except nonfood service businesses, to fund their initial operations.
B)They offer office space for new businesses at reduced rates and provide services such as a receptionist.
C)They maintain the liquidity of the business by entering into agreements with financiers and creditors.
D)They are usually swamped with failing businesses that face bankruptcy and would like to be considered for a turnaround.

Question 58

________ 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

Question 59

In production management, the two most important elements are

A)charting and quality.
B)financing and quality.
C)charting and organization.
D)financing and organization.

Question 60

According to the book, which of the following terms is used to discuss the acceptance by key stakeholders that your business is more than just a "start-up" and will be successful?

A)Efficiency
B)Applicability
C)Efficacy
D)Legitimacy

Question 61

It is relatively common for new equipment to depreciate in the first year after purchase.What is the typical rate of depreciation of new equipment in the first year?

A)Less than 50 percent
B)More than 10 percent
C)More than 50 percent
D)Less than 40 percent

Question 62

Which of the following factors should a new business owner consider when deciding the best time to start a new business?

A)Competitors' moves
B)The general environment
C)Lifestyle issues
D)All of these

Question 63

A(n)________ defines the steps that are involved in moving from a product or service offering to the point where one actually receives money.

Question 64

A(n)________ is a living document that should be modified during the process of actually accomplishing the tasks.

Question 65

Which of the following is typical when purchasing new equipment instead of used equipment?

A)It is usually the most expensive option.
B)It is delivered directly to the new business.
C)It is guaranteed that the new equipment is the most current available.
D)All of these

Question 66

Bubbles Beverages Company entered into a sponsorship agreement with Play Big Stadium.According to this agreement, the company will sponsor the stadium to maintain its courts regularly.In return, the stadium should allow only company products to be sold inside its premises.Identify the type of business relation between Bubbles Beverages Company and Play Big Stadium.

A)Limited partnership
B)Investment alliance
C)Limited liability partnership
D)Strategic alliance

Question 67

Which of the following correctly depicts the typical cycle of the economy?

A)Growth, boom, slowdown, recession, and boom
B)Boom, growth, slowdown, recession, and boom
C)Boom, slowdown, recession, growth, and boom
D)Boom, slowdown, recession, and growth

Question 68

When using a time management system, a new owner must ________ his or her tasks.

A)alphabetize
B)prioritize
C)study
D)analyze

Question 69

According to Dr.W.Edwards Deming, rather than focusing on obtaining the lowest prices for supplies, firms should focus on

A)the quantity of inputs.
B)the quality of inputs.
C)both of these.
D)none of these.

Question 70

Which of the following statements is true of the production chart of a business firm?

A)It focuses on the founding of a business.
B)It details each step that must occur within a production process.
C)It starts with the delivery to a customer and finishes with a final order being received.
D)It is different from a critical path chart in that all steps in a production process must occur simultaneously.

Question 71

________ is considered the father of the quality movement in the United States.

A)Peter Drucker
B)Dr.W.Edwards Deming
C)George Isoo
D)Frederick Taylor

Question 72

Which of the following is true of the opening time of a business?

A)The opening of a new business does not depend on the competitors' moves
B)The timing of start is a function of the general environment and lifestyle issues.
C)Entrepreneurs should realize that businesses depend on similar conditions for opening.
D)One should open a business during or at the beginning of a recession.

Question 73

The timing of opening up a new business is impacted by all the following EXCEPT

A)line of credit.
B)general environment.
C)competitor moves.
D)lifestyle issues.

Question 74

Universal Studios, which made the Indiana Jones movies, forms a relationship with Burger King to put advertisements for a movie on drink cups.This is a form of ________.

A)compact alliance
B)strategic alliance
C)promotional alliance
D)none of these

Question 75

________ are a potential setting for new businesses (especially nonfood service businesses)to locate their initial operations.

Question 76

Mama's Hot Dogs Store is a leading fast-food restaurant that sells a variety of hot dogs.This restaurant is known for its impeccable customer service.It provides a playground for kids, maintains clean tables and restrooms, and provides free Wi-Fi.John, an entrepreneur, wants to start a fast-food restaurant and compete against Mama's Hot Dogs Store.Which of the following strategies would most probably help John to be more successful than Mama's Hot Dogs Store?

A)Providing better quality of food and service
B)Charging higher prices for the food and service
C)Giving more quantity of food
D)Giving discounts on unsold food items

Question 77

According to Dr.W.Edwards Deming's quality movement, quality efforts need to be ________ and ________ improved.

A)fair; consistently
B)constantly; consistently
C)constantly; justly
D)fair; justly

Question 78

________ stores are major retail stores in a mall.They serve as the foundation for the rest of the establishments.

Question 79

What does a new business owner need to keep in mind while making a decision about what equipment to buy?

A)How long it will be before the equipment will need to be replaced
B)The type of equipment needed
C)The cost of the equipment
D)All of these

Question 80

Your ability to obtain critical supplies may dictate your ________ time and ________ time.

A)order; supply
B)lead; opening
C)supply; lead
D)none of these