Disintermediation refers to which of the following?

• A. Removal of step of supply chain
• B. Outsourcing to third parties
• C. Creation of a new intermediary
• D. Expanding supplier base

Answer: (A)

Disintermediation means removing intermediaries from the supply chain so the producer can deal directly with customers, shortening the path from producer to market and often cutting costs or improving speed and control. The description of removing a step in the chain fits this idea exactly. For example, a manufacturer selling directly online to consumers bypasses distributors or retailers.

The other ideas describe different concepts. Outsourcing to third parties involves using external providers for tasks but doesn’t necessarily remove a step in the chain or bypass middlemen. Creating a new intermediary is the opposite of disintermediation. Expanding the supplier base broadens sources rather than removing the existing intervening steps.