To Make a Choice Between Vertical Integration or External Sourcing

question 41

Multiple Choice

To make a choice between vertical integration or external sourcing, which statement is true?

• A)It depends on the specific factors prevailing
• B)Vertical integration is preferable in a technology-intensive industry
• C)Market sourcing is preferable when the industry is very fragmented
• D)It is simply a matter of managerial preference

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Definitions:

Depository Institutions

Commercial banks and thrift institutions; financial institutions that accept deposits from the public

Customer Deposits

Funds placed by customers with a company, often in the context of financial services, which may be used for further transactions or withdrawn later.

Maximize Profits

The objective of optimizing the difference between total revenues and total costs to achieve the highest possible financial gain.

Board of Governors

A leading body of a central banking system, such as the Federal Reserve in the United States, responsible for overseeing the bank's policies and operations.