Which of the following is an advantage of backward vertical integration?

• A. Guaranteed and timely supply of stock
• B. Higher marketing costs
• C. Increased dependency on external suppliers
• D. Reduced quality control

Answer: (B)

Backward vertical integration means a company takes control of its inputs by owning or merging with its suppliers. The main advantage is a more reliable, timely supply of materials, because the firm is now the source of those inputs. With direct control over upstream activities, production planning becomes more predictable, stockouts and delays are reduced, and coordination across stages improves. It can also help with quality control, since standards can be applied consistently across the supply chain.

So the best answer is the guarantee of a steady and timely stock flow. Higher marketing costs aren’t an inherent advantage of this move, and increased dependence on external suppliers or poorer quality control would contradict what integration aims to achieve.