APICS Certified Supply Chain Professional (CSCP) — Question 166

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:

Answer options

• A. vertical integration in the supply chain.
• B. horizontal integration in the supply chain.
• C. supplier relationship management (SRM).
• D. expansion in the scale of operations.

Correct answer: D

Explanation

The correct answer is D, as purchasing a paper mill represents an expansion in the scale of operations by integrating a key part of the supply chain. A is incorrect because vertical integration specifically refers to controlling more levels of the supply chain, while B refers to acquiring similar companies at the same level. C is not applicable here since supplier relationship management focuses on managing supplier interactions rather than acquiring suppliers.