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Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. The differences depend on where the firm is placed in the order of the supply chain. There are three varieties of vertical integration: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both ...
Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a commercial transaction with another. This typically occurs when: This typically occurs when: A business sources materials for its production process for output (e.g., a food manufacturer purchasing salt), i.e. providing raw material to the other ...
Since (by definition) upstream and downstream prices are related: in absence of external shocks, some kind of economic equilibrium relationship between those two should exist; external shocks to the system (i.e. shocks to downstream or upstream prices) should trigger short- and long-run adjustment towards the long-run equilibrium, as:
There are a variety of supply-chain models, which address both the upstream and downstream elements of supply-chain management (SCM). The SCOR ( Supply-Chain Operations Reference ) model, developed by a consortium of industry and the non-profit Supply Chain Council (now part of APICS ) became the cross-industry de facto standard defining the ...
Double marginalization occurs when both the upstream and downstream firms have monopoly power and each firm reduces output from the competitive level to the monopoly level, creating two deadweight losses. After a merger, the vertically integrated firm can collect one deadweight loss by setting the downstream firm's output to the competitive level.
An upstream price is the price of one of the main inputs of production (for processing/manufacturing etc.) or a price quoted on higher market levels (e.g. wholesale markets). Upstream prices are the prices paid by producers (as opposed to consumers ), and are directly related to the cost of production .
Downstream, in manufacturing, refers to processes which occur later on in a production sequence or production line. Viewing a company "from order to cash" might have high-level processes such as marketing, sales, order entry, manufacturing, packaging, shipping, and invoicing. Each of these could be deconstructed into many sub-processes and ...
In telecommunications marketing, the term DSL is widely understood to mean asymmetric digital subscriber line (ADSL), the most commonly installed DSL technology, for Internet access. In ADSL, the data throughput in the upstream direction (the direction to the service provider) is lower, hence the designation of asymmetric service.