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Question 427 - CSCP discussion

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A company has decided to source, manufacture, and distribute its products from its own facilities located throughout the world. This strategy is best described as:

A.
horizontal integration.
Answers
A.
horizontal integration.
B.
a universal distribution system.
Answers
B.
a universal distribution system.
C.
vertical integration.
Answers
C.
vertical integration.
D.
an outsourced supply chain.
Answers
D.
an outsourced supply chain.
Suggested answer: C

Explanation:

Definition: Vertical integration occurs when a company controls multiple stages of its supply chain, from raw materials to the final product distribution.

Horizontal Integration (Option A): This refers to the acquisition of competitors or expansion within the same stage of the supply chain, not across multiple stages.

Universal Distribution System (Option B): This is not a standard term in supply chain management and does not accurately describe the scenario.

Vertical Integration (Option C): The company is sourcing, manufacturing, and distributing products from its own facilities globally, indicating control over multiple stages of the supply chain, characteristic of vertical integration.

Outsourced Supply Chain (Option D): This would imply reliance on external partners for various supply chain functions, which is not the case here.

Reference: Supply Chain Management literature, Vertical Integration studies.

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asked 16/09/2024
JP Pelovello
48 questions
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