For Backward Vertical Integration into the Business of Suppliers to Be

question 11

Multiple Choice

For backward vertical integration into the business of suppliers to be a viable and profitable strategy,a company must

• A) have considerable expertise in supply chain management,transportation logistics,and inventory control techniques.
• B) be able to achieve the same scale economies as outside suppliers and also match or beat suppliers' production efficiency with no drop in quality.
• C) have large state-of-the-art production facilities so that it can fully capture all economies of scale in producing parts and components.
• D) have core competences in R&D,product design and engineering,and distribution logistics so that it will have adequate capabilities to produce and distribute parts and components in a timely and cost-effective manner.
• E) have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

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Definitions:

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