APICS Certified Supply Chain Professional (CSCP) — Question 54

A brewing company recently acquired a trucking company to deliver products to the brewery's distribution centers (DCs). Which of the following terms most accurately describes the firms' relationship?

Answer options

• A. Parallel integration
• B. Vertical integration
• C. Internal integration
• D. Horizontal integration

Correct answer: B

Explanation

The correct answer is B, vertical integration, as it involves a company expanding its control over the supply chain by acquiring a logistics provider. The other options do not accurately represent this scenario: A (parallel integration) involves companies at the same level of the supply chain, C (internal integration) refers to consolidating operations within a single company, and D (horizontal integration) involves acquiring competitors at the same level in the industry.