Final answer:
A merchandising firm that buys all inventory from outside suppliers is not integrated, as it does not control various stages of production or distribution, which would be required for vertical or horizontal integration.
Step-by-step explanation:
A merchandising firm that buys all of its inventory from outside suppliers is an example of a firm that is not integrated. When a company is vertically integrated, it controls different stages of production or distribution within the same industry. This can include controlling the supply chain from raw materials to the manufacturing process and up to the sale of the finished product. On the other hand, horizontal integration occurs when a company merges with or acquires another company in the same industry at the same production stage. Lateral integration could be considered a form of horizontal integration, where firms at the same production stage and of similar sizes combine.
Considering that the firm in question only purchases inventory from outside sources rather than aiming to control or manage different stages of production or distribution, it cannot be categorized as vertically, horizontally, or laterally integrated. Such a firm operates independently of the manufacturing or production process and, therefore, is not integrated.