Company A sells plastic pellets which are used by Company B

Company A sells plastic pellets, which are used by Company B to make plastic milk jugs, which are sold to Company c, which produces milk or retail sales and other dairy products. Company A is a _______________ to Company C. a. Tier I supplier b. Tier 2 supplier c. Tier 3 supplier

Solution

Firms C that sells milk and other dairy products in this case, is the Original Manufacturer. Any company that sells finished components to Original manufacturer is a Tier 1 supplier. Hence, Company B is a Tier 1 supplier to Company C.

Any company that supplies directly to Tier 1 is a tier 2 company. Hence,Company A is a Tier 2 supplier to Company C. Therefore, your answer is right.