Which advantage is associated with backward vertical integration?

Backward vertical integration occurs when a company expands its operations by acquiring or merging with suppliers or manufacturers that provide the raw materials or components necessary for its products. This strategy presents several distinct advantages, one of which is the timely and guaranteed supply of stock.

By integrating backward, a business secures a more direct control over its supply chain, meaning that it can ensure that materials are available when needed, without delays that may occur when relying on outside suppliers. This reliability can lead to less disruption in production processes and help maintain consistent product quality.

In addition to guaranteed supply, this integration often leads to reduced costs associated with purchasing materials from external vendors, potential improvements in bargaining position, and enhanced ability to control production schedules. Therefore, the choice highlighting the timely and guaranteed supply of stock accurately reflects a significant benefit of backward vertical integration.