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Ch. 14 Choosing the Right Location and Layout

by: Alora Lornklang

Ch. 14 Choosing the Right Location and Layout MGMT 3850

Marketplace > University of North Texas > Entrepreneurship > MGMT 3850 > Ch 14 Choosing the Right Location and Layout
Alora Lornklang
GPA 3.5

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About this Document

These notes will cover the learning objectives and vocabulary of chapter 14.
Foundations of Entrepreneurship
Brandi Everett
Class Notes
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This 3 page Class Notes was uploaded by Alora Lornklang on Sunday May 1, 2016. The Class Notes belongs to MGMT 3850 at University of North Texas taught by Brandi Everett in Spring 2016. Since its upload, it has received 19 views. For similar materials see Foundations of Entrepreneurship in Entrepreneurship at University of North Texas.

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Date Created: 05/01/16
MGMT 3850 Foundations of Entrepreneurship Chapter 14: Choosing the Right Location and Layout 1. Explain the stages in the location decision: Choosing the region, the state, the  city, and the final site. a. The location decision is one of the most important decisions an  entrepreneur will make given its long­term effects on the company. An  entrepreneur should look at the choice as a series of increasingly narrlow  decisions: Which region of the country? Which state? Which city? 2. Describe the location criteria for retail and service businesses a. For retailers, the location decision is especially crucial. Retailers must  consider the size of the trade area, the compatibility of surrounding  businesses, the degree of competition, the suitability of the surrounding  transportation network, physical and psychological barriers, volume of  customer traffic, adequacy of parking spots, a site’s reputation, and the  site’s visibility.  3. Outline the location options for retail and service businesses: central business  districts, neighborhoods, shopping centers and malls, near competitors, shared  spaces, inside large retail stores, nontraditional locations, at home, and on the  road. a. Retail and service businesses have nine basic location options: central  business districts; neighborhoods; shopping centers and malls; near  competitors, shared spaces; inside large retail stores; nontraditional  locations, such as museums, sports, arenas, and college campuses; at  home; and on the road 4. Explain the site selection process for manufacturers a. A manufacturer’s location decision is strongly influenced by local zoning  ordinances. Some areas offer industrial parks designed specifically to  attract manufacturers. Two crucial factors for most manufacturers are the  reliability (and the cost of transporting) raw materials and the quality and  quantity of available labor b. A foreign trade zone is a specially designated area in or near a U.S.  customs port of entry that allows resident companies to import materials  and components from foreign countries; assemble, process, manufacture,  or package them; and then ship the finished product while either reducing  or eliminating tariffs and duties c. Business incubators are locations that offer flexible, low­cost rental space  to their tenants as well as business and consulting services. Their goal is  to nurture small companies until they are ready to “graduate” into the  business community. Many government agencies and universities sponsor incubator locations.  5. Describe the criteria used to analyze the layout and design considerations of a  building, including the Americans with Disabilities Act.  a. When evaluating the suitability of a particular building, an entrepreneur  should consider several factors: size, construction, and external  appearance, sound, entrances, legal issues, signs, interior, and lights and  fixtures. 6. Explain the principles of effective layouts for retailers, service businesses, and  manufacturers a. Layout for retail stores and service businesses depend on the owner’s  understanding of his or her customers’ buying habits. Some areas of a  retail store generate more sales per square foot and therefore are more  valuable b. The goal of a manufacturer’s layout is to create a smooth, efficient work  flow. Three basic options exist: product layout, process layout, and fixed  position layout. Two key considerations are worker productivity and  materials handling costs.  Vocabulary  Clusters o Geographic concentrations of interconnected companies, specialized  suppliers, and service providers that are present in a region.   Zoning laws  o Laws that divide a city or country into small cells or districts to control the use of land, buildings, and sites  Variance o A special exemption to a zoning ordinance  Trading area o The region from which a business can expect to draw customers over a  reasonable time span   Retail compatibility o The benefits a company receives by locating near other businesses that sell complementary products and services or that generate high volumes of  traffic   Index of retail saturation  o A measure of the potential sales per square foot of store space for a given  product within a specific trading area; it is the ratio of a trading area’s  sales potential for a product or service to its sales capacity  Coworking  o A situation in which two or more small companies share the same space  Foreign trade zone  o A specially designated area in or near a US customs port of entry that  allows resident companies to import materials and components to import  materials and components from foreign countries; assemble, process,  manufacture, or package them, and then ship the finished product while  either reducing or eliminating tariffs and duties.   Business incubator  o An organization that combines low­cost, flexible, rental space with a  multitude space with a multitude of support services for its small  businesses residents  Layout o The logical arrangement of the physical facilities in a business that  contributes to efficient operations, increased productivity, and higher sales  Americans with Disabilities Act (ADA) o A law that requires practically all businesses to make their facilities  available to physically challenged customers and employees.   Ergonomics o The science of adapting work and the work environment to complement  employees’ strengths and to suit customers’ needs  Product (line) layout o An arrangement of workers and equipment according to the sequence of  operations performed on a product  Process layout o An arrangement of workers and equipment according to the general  function they perform, without regard to any particular product or  customer   Fixed position layout o An arrangement in which materials do not move down a production line  but rather, because of their weight, size, or bulk, are assembled on the spot


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