Question 1

Your goal is to sell jogging shoes to those 65 and other who live in Florida.  Here is some information you have collected:  (1) There are 3 million joggers 65 and older in the U.S. (2) 600,000 of them live in Florida.  (3) Florida attracts 20% of all people who move when they retire.  (4) You estimate that during your first year you will capture 2 percent of the Florida joggers who are age 65 or older.  (5) You estimate that your sales will increase by 25% in year 2.
-Which of the following piece(s) of information would be used to forecast your demand for year 2

Accepted Answer

A)  3 million joggers who are 65 or older 
B)  Your estimate that you will capture 2 percent of the Florida joggers in year 1. 
C)  Your estimate that your sales will increase by 25% in year 2 
D)  Both b and c

Question 2

All of the following are characteristics of a typical entrepreneurial start-up except:

Accepted Answer

A)  the start-up focuses on new opportunities. 
B)  its owners are willing to take risks. 
C)  it creates innovative products and/or practices. 
D)  it focus on growth rather than profits.

Question 3

Let’s say you want to open a shoe store that will specialize in high-end shoes. But before you do, you want to determine how many pairs of shoes you have to sell in the first year to break even (have no profit or loss). You also want to know what your profit will be in year two. You have been busy estimating some revenues and costs. Here is what you have so far:
$
\begin{array}{ll}
\text{Cost (to you) per pair of shoes}&	\$80\
\text{Sales commission per pair of shoes}&	\$10\
\text{Managers’ Salaries}	&\$420,000\
\text{Rent	}&\$120,000\
\text{Advertising}&	\$20,000\
\text{Insurance	}&\$16,000\
\text{Miscellaneous fixed costs}&	\$24,000\
\text{Selling price per pair of shoes}&	\$160
\end{array}$
-How much are total fixed costs

Accepted Answer

A)  $600,250 
B)  $600,000 
C)  $250 
D)  $90

Question 4

Talking to people in your prospective industry can be especially helpful if your proposed product is a service.

Accepted Answer

A) True 
 B)False

Question 5

Dan the Dog Groomer estimates that 600 poodle owners in Decatur will bring their dogs to his shop during his first year of business. Dan probably arrived at this number by trying to calculate his market share.

Accepted Answer

A) True 
 B)False

Question 6

Document your idea:

Accepted Answer

A)  after you have discussed it with your lawyer. 
B)  after you have completed a prototype of the product. 
C)  as soon as possible. 
D)  after you have test marketed it.

Question 7

Where do the inventors of products apply for protection against the theft of their ideas by other parties?

Accepted Answer

The answer of Where do the inventors of products apply...

Question 8

The goal of the "design with manufacturing in mind" step in the product development process is to:

Accepted Answer

A)  consider the workload of those in production. 
B)  build both quality and efficiency into the manufacturing process. 
C)  be sure any proposed products can be made easily. 
D)  eliminate any product ideas that will require new manufacturing equipment.

Question 9

____ is one of the hardest tasks in business.

Accepted Answer

A)  forecasting demand for a proposed product 
B)  selecting employees to manufacture a product 
C)  choosing capable managers to oversee operations 
D)  getting capital to fund operations

Question 10

BetterBuilt Products, a large machine shop in the Pacific Northwest, employs 138 people in design, accounting, sales, purchasing, production, and delivery. The company’s machined products are of the highest quality, production almost always stays “on track,” and delivery generally meets or exceeds customer expectations. Management regularly looks for ways to improve effectiveness and efficiency of operations by reducing production/cycle time and cutting costs.
-The product development process at BetterBuilt begins and ends with the evaluation of opportunities and selection of the best product ideas.

Accepted Answer

A) True 
 B)False

Question 11

The selling price per unit minus the variable cost per unit is called _____.

Accepted Answer

A)  contribution margin per unit 
B)  the breakeven point in units 
C)  survival price 
D)  fixed price

Question 12

Connie’s is a regional chain of family style restaurants in the Midwest. Over the years, Connie Sedgewick has been an innovative, hard working businessperson who’s expanded her business to 15 locations in four states. A “calling card” of her restaurants is the superior customer service provided by the entire staff and the ability to add and change menu items for local customer preferences. Connie has a good working relationship with suppliers, employees, and customers and a good reputation in the communities where she does business.
-A familystyle, dine-in restaurant is best characterized as a _____ business.

Accepted Answer

A)  service 
B)  product 
C)  combined service/product 
D)  lifestyle

Question 13

The key to coming up with a great product idea is finding a product you are passionate about.

Accepted Answer

A) True 
 B)False

Question 14

If your proposed business was a frozen yogurt store in Michigan, you could get an estimate of the number of customers you might have if you asked those leaving a bakery in California if they'd buy frozen yogurt in the winter.

Accepted Answer

A) True 
 B)False

Question 15

What criteria must an invention meet to be patentable?

Accepted Answer

The answer of What criteria must an invention meet to...

Question 16

The PowerSki Jetboard is best characterized as a _____.

Accepted Answer

A)  consumer product 
B)  a good 
C)  a component 
D)  merchandise item

Question 17

What is an industry?

Accepted Answer

The answer of What is an industry?...

Question 18

Which of the following questions is not helpful to ask when researching an industry

Accepted Answer

A)  Is the industry growing or contracting 
B)  How important is technology to the industry 
C)  Do companies in the industry make reasonable profits 
D)  Do other small business owners that I know find the industry interesting

Question 19

The product development process results in the generation of new business ideas.

Accepted Answer

A) True 
 B)False

Question 20

A street vendor selling hotdogs outside an office building is creating place utility.

Accepted Answer

A) True 
 B)False

Exam 10: Product Design and Development

All of the following are characteristics of a typical entrepreneurial start-up except:

Talking to people in your prospective industry can be especially helpful if your proposed product is a service.

Dan the Dog Groomer estimates that 600 poodle owners in Decatur will bring their dogs to his shop during his first year of business. Dan probably arrived at this number by trying to calculate his market share.

Document your idea:

Where do the inventors of products apply for protection against the theft of their ideas by other parties?

The goal of the "design with manufacturing in mind" step in the product development process is to:

____ is one of the hardest tasks in business.

The selling price per unit minus the variable cost per unit is called _____.

The key to coming up with a great product idea is finding a product you are passionate about.

If your proposed business was a frozen yogurt store in Michigan, you could get an estimate of the number of customers you might have if you asked those leaving a bakery in California if they'd buy frozen yogurt in the winter.

What criteria must an invention meet to be patentable?

The PowerSki Jetboard is best characterized as a _____.

What is an industry?

Which of the following questions is not helpful to ask when researching an industry

The product development process results in the generation of new business ideas.

A street vendor selling hotdogs outside an office building is creating place utility.