Which of the following is an example of FORWARD integration?
A) a food processing company's decision to enter into long term supply contracts with farmers.
B) a group of farmers decision to form a cooperative to build and operate a roadside market to sell fresh produce.
C) an auto manufacturer deciding to purchase interior door panels from suppliers rather than manufacturer them internally.
D) the decision by the owner of a sawmill to buy a large woodlot adjacent to the mill.

Question

Quizplus · Accepted Answer

Forward integration involves a company moving downstream along the supply chain to take control over the distribution of its products. In this case, the group of farmers forming a cooperative and building a roadside market to sell their produce is an example of forward integration because they are taking control over the distribution of their products to consumers. The other options do not involve a company moving downstream along the supply chain to take control over distribution.

Which of the Following Is an Example of FORWARD Integration