Question 83
Business CombinationsIf a motor assembly plant absorbs a tyre manufacturing company solely for its tyre needs, such an arrangement is known as
- A.vertical integration
- B.lateral integration
- C.horizontal integration
- D.diagonal integration
- E.forward integration
Show the answer and explanation
Answer: A (vertical integration)
Explanation
The tyre maker supplies an input to the car plant, so they are at different stages of the same production chain: vertical integration.