A Vertical Integration Strategy Can Expand the Firm's Range of Activities

question 65

Multiple Choice

A vertical integration strategy can expand the firm's range of activities

• A)backward into sources of supply and/or forward toward end users.
• B)backward into other industry business lines and/or forward to suppliers of raw materials.
• C)to enable the supply chain the opportunity for expansion.
• D)to complement the industry's horizontal value chain line of profitability.
• E)to establish full integration by participating in a tapered integration (without the outsourced and in-house activities).

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Definitions:

Financial Ratios

Quantitative measures derived from financial statement data used to evaluate a company's financial performance, financial health, and to compare it with other businesses or the industry average.

Default Risk

The possibility that a borrower will be unable to make the required payments on their debt obligations.

Days Payable Outstanding

A financial ratio that measures the average number of days a company takes to pay its suppliers; an indicator of how efficiently a company manages its payables.

Cash Receipts

The collection of money, including coins, currency, checks, and electronic transfers, received by a business or organization.