If Happy Avocados, a ready- made guacamole manufacturer, contracts with an outside supplier to produce avocados, this is an example of______ _.
A)backward integration
B)outsourcing
C)forward integration
D)divestiture

Question

Quizplus · Accepted Answer

Outsourcing refers to hiring an outside supplier or contractor to perform a task or service that could be done in-house. In this case, Happy Avocados is outsourcing the production of avocados (an important ingredient in their ready-made guacamole). Backward integration refers to a company integrating with a supplier to control the production of raw materials. Forward integration refers to a company integrating with a distributor or retailer to control the distribution of their products. Divestiture refers to a company selling off a portion of its business or assets.

If Happy Avocados, a Ready- Made Guacamole Manufacturer, Contracts with an Outside