In this type of integration, parts of the supply chain are owned and operated by the same company.

• A. Lateral
• B. Vertical
• C. Horizontal
• D. Diagonal

Answer: (B)

Vertical integration occurs when a single company owns and operates multiple stages of its supply chain, such as sourcing raw materials, manufacturing components, and distributing the final product. That ownership and control across different parts of the chain is exactly what the item describes. For example, a company that owns its own raw-material mines, its own manufacturing plants, and its own logistics and retail outlets is vertically integrated. This is different from horizontal integration, which would involve acquiring or merging with other firms at the same stage of production (like another manufacturer at the same level). Diagonal isn’t a standard term for this concept.