Taper integration
A)has higher bureaucratic costs than does full integration.
B)has lower bureaucratic costs than does long-term contracts.
C)can increase the incentive for in-house suppliers to reduce costs.
D)is preferable to full integration when demand conditions are stable.
E)eliminates the disadvantage of potential technological obsolescence.

Question

Quizplus · Accepted Answer

Taper integration involves a gradual reduction in the number of suppliers while encouraging in-house suppliers to improve their performance. This can increase the incentive for in-house suppliers to reduce costs and improve efficiency. Taper integration generally involves lower bureaucratic costs than full integration, as it allows the firm to maintain some degree of separation from its suppliers. Taper integration is also useful in conditions of unstable demand, as it allows the firm to adjust its supply chain more easily. However, taper integration may not eliminate the disadvantage of technological obsolescence, as in-house suppliers may not have access to the latest technologies and innovations.

Taper Integration