____ integration refers to acquiring capabilities at the front of the supply chain, whereas ____ integration refers to acquiring capabilities toward the back end of the supply chain.
A)Vertical, horizontal
B)Upward, downward
C)Forward, backward
D)Backward, forward

Question

Quizplus · Accepted Answer

Vertical integration refers to the combination of two or more stages of the supply chain within a single company (e.g., a manufacturer acquiring a distributor). This can be either backward integration (acquiring capabilities toward the suppliers) or forward integration (acquiring capabilities toward the customers). On the other hand, horizontal integration refers to the combination of two or more companies at the same stage of the supply chain (e.g., a manufacturer acquiring a competitor). Therefore, options A and B are not correct, and option D is incorrect because it reverses the order. Option C is correct because it refers to acquiring capabilities in a forward direction (e.g., manufacturing capabilities, distribution channels) and backward direction (e.g., raw material sourcing, supplier relationships), respectively.

____ Integration Refers to Acquiring Capabilities at the Front of the Supply