The Strategic Impetus for Forward Vertical Integration Is to

question 28

Multiple Choice

The strategic impetus for forward vertical integration is to

• A)gain better access to end users,improve market awareness,and/or include the end user's purchasing experience as a differentiating feature.
• B)the opportunity to capture the profits being earned by forward distribution allies (and thereby increase the company's own profits).
• C)reduce or eliminate disruptions in the delivery of the company's products to end users.
• D)avoid channel conflict.
• E)expand a company's geographic coverage.

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Definitions:

Direct Labor-Hours

The aggregate amount of time spent by staff members directly participating in the creation process.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, based on an activity driver.

Fixed Manufacturing Overhead

Costs in the manufacturing process that remain constant regardless of the production volume, including equipment depreciation and building lease expenses.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production of goods or services.