To reduce costs and increase control of its primary raw material, a manufacturer of corrugated and cardboard materials and cartons purchases a paper mill. This is an example of:
To reduce costs and increase control of its primary raw material, a manufacturer of corrugated and cardboard materials and cartons purchases a paper mill. This is an example of:
When a manufacturer of corrugated and cardboard materials and cartons purchases a paper mill to reduce costs and increase control over its primary raw material, it is engaging in vertical integration in the supply chain. Vertical integration occurs when a company takes control of more than one stage of the supply chain, which can include production, raw material supply, and distribution. By purchasing the paper mill, the manufacturer is moving upstream in its supply chain to gain greater control over the raw materials it uses.
Answer is A
D: the manufacturer not acquiring with the supplier but only purchase a paper mill not to be replace the supplier but to expand the fabrication process, so D is the right answer If the manufacturer's acquisition of the paper mill is primarily aimed at expanding its operations and increasing control over the fabrication process, then option D, "expansion in the scale of operations," would indeed be the most appropriate answer. Therefore, if the primary motivation behind acquiring the paper mill is to expand the fabrication process and enhance the manufacturer's operations, option D would be the correct choice.
The company is looking for CONTROL so they buy a provider.