Afirm that backward vertically integrates a. may be producing its own inputs. b. moves downstream in the production process. c. requires that the production process be relatively simple. d. has to merge with another firm.

The purchasing agent for a company that assembles and sells air-conditioning equipment in a latin american country noted that the cost of compressors has increased significantly each time they have been reordered. the company uses an eoq model to determine order size. what are the implications of this price escalation with respect to order size? what factors other than price must be taken into consideration?