For cake-a-licious, a large bakery business, that purchased a wheat farm in order to reduce the risk associated with its dependency on flour, this is an example of forward vertical integration. Option D is correct.
When the supply chain of a company is integrated with another company where the supply chain produces a different product from that of the first company, it is term vertical integration.
This is in contrast with horizontal integration that has to do with the integration of a company with another company producing similar products.
Both horizontal and vertical integration can both be vertical or horizontal in nature.
For cake-a-licious, a large bakery business, that purchased a wheat farm in order to reduce the risk associated with its dependency on flour, this is an example of forward vertical integration since the supply chain of the cake business is different from that of the farm businesss.
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