Which is an example of forward integration?

Forward integration refers to a strategy where a company expands its operations into the distribution or retailing phases of its supply chain. This means that the company takes control of the processes that happen after production, allowing it to sell directly to consumers rather than relying on intermediaries.

In this context, the correct answer demonstrates forward integration because it illustrates a farmer moving directly from growing crops to selling them at a market. By doing so, the farmer bypasses traditional distribution channels, such as wholesalers or retailers, and directly connects with the end consumer. This approach enables the farmer to capture more value from the sales process and have direct access to market demand.

The other scenarios provided involve different aspects of the supply chain. A manufacturer producing its components signifies backward integration, where a company controls more of its supply chain by producing inputs itself. A retailer purchasing inventory for resale highlights a retail operation but does not illustrate a move forward in the supply chain from production to consumer. Lastly, a supplier managing its own distribution center represents logistical control but again does not embody the forward movement toward direct customer engagement that is characteristic of forward integration.