A widget producer is contemplating backward integration into the manufacture of widget components. If all of the statements below are true, then which statement provides the strongest rationale for backward integration? A. Component manufacturers have high profit margins. B. Component manufacturers fail at extremely low rates. C. Components are a small percentage of a widget’s production costs. D. Two of only four worldwide component manufacturers merged last year. E. Component quality is easily and cheaply verified. F. Both A and B. G. Both A and C. H. Both B and C. I. Both D and E.
A widget producer is contemplating backward integration into the manufacture of widget components. If all of the statements below are true, then which statement provides the strongest rationale for backward integration? A. Component manufacturers have high profit margins. B. Component manufacturers fail at extremely low rates. C. Components are a small percentage of a widget’s production costs. D. Two of only four worldwide component manufacturers merged last year. E. Component quality is easily and cheaply verified. F. Both A and B. G. Both A and C. H. Both B and C. I. Both D and E.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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A widget producer is contemplating backward integration into the manufacture of widget components. If all of the statements below are true, then which statement provides the strongest rationale for backward integration?
| A. |
Component manufacturers have high profit margins. |
|
| B. |
Component manufacturers fail at extremely low rates. |
|
| C. |
Components are a small percentage of a widget’s production costs. |
|
| D. |
Two of only four worldwide component manufacturers merged last year. |
|
| E. |
Component quality is easily and cheaply verified. |
|
| F. |
Both A and B. |
|
| G. |
Both A and C. |
|
| H. |
Both B and C. |
|
| I. |
Both D and E. |
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