Which scenario illustrates backward integration?

Backward integration refers to a business strategy where a company expands its role to include control over its supply chain by acquiring or merging with suppliers or by sending data back to the source systems. This strategy is aimed at gaining more control over production and enhancing the quality and efficiency of inputs.

In the context of the correct answer, sending upstream data back to the source systems demonstrates backward integration because it involves the communication and flow of information back to the origin of the data. This process enables the company to improve its understanding of the data's origins, possibly enhancing product quality or operational processes at the initial stages of production or service delivery. By creating a feedback loop, the organization can ensure better alignment with its suppliers and improve supply chain efficiency.

This scenario underscores the foundational concept of backward integration—integrating processes that occur before the current operation in the supply chain, thus fostering a more cohesive and controlled production environment.