Which of the Following Statements Regarding Vertical Integration Is FALSE

question 38

Multiple Choice

Which of the following statements regarding vertical integration is FALSE?

• A)Vertically integrated companies may be large,but unlike other large corporations,since they remain focused in one industry,they are easy to run.
• B)A company might not be happy with how its products are being distributed,so it might decide to take control of its distribution channels.
• C)A company might conclude that it can enhance its product if it has direct control of the inputs required to make the product.
• D)The principal benefit of vertical integration is coordination.By putting two companies under central control,management can ensure that both companies work toward a common goal.

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Definitions:

Material Handling Costs

Expenses involved in moving, protecting, storing and controlling materials throughout the manufacturing process.

Fixed-Position Layout

A system that addresses the layout requirements of stationary projects.

Job Lots

Groups or batches of parts processed together.

Product Differentiation Strategy

A marketing strategy that businesses use to distinguish their products from those of competitors, typically through unique features, performance, or quality.