Frank, the Owner of a Local Furniture Store That Has

question 28

Multiple Choice

Frank, the owner of a local furniture store that has been in business for 75 years, is retiring. He is selling his store to a new venture capitalist with no roots in the community. As they sit down over coffee at the local deli, what are some things that Frank should share with the new owner about the success of his business?

• A) Frank should share the organizational chart, as well as a list of local businesses not to partner with.
• B) Frank should share his list of interview questions for hiring new employees.
• C) Frank should share the culture of the company through stories, rites, and rituals.
• D) Frank should share his list of buyers and how he negotiated his prices.
• E) Frank should share which community events he has already agreed to take part in over the next three years.

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Definitions:

Switching

The act of changing from one option, system, service, product, or company to another, often seen in customers changing providers or businesses changing suppliers or technologies.

Economic Order Quantity

A formula used by companies to determine the optimal order size that minimizes the total costs associated with inventory.

Carrying Cost

The total cost of holding inventory, which includes storage, insurance, depreciation, spoilage, and opportunity cost.

Fixed Cost

Costs that do not change with the volume of production or level of activity within a certain range.