2 How do supply chains work Give an example of a firm real o

2. How do supply chains work? Give an example of a firm (real or fictitious) and its suppliers. What\'s being sold? What are the direct and indirect materials for the end product or service? What does each tier supplier in the supply chain sell to the other tiers or the firm itself?(20 points)

Solution

Supply chain refers to the set of organizations, product, people, and activities that are involved in delivering a product or service to the end customer. A general supply chain is comprised of tier II supplier, tier I supplier, manufacturer, distributor, retailer, and the customer. Consider the example of supply chain of McDonalds. The company sells a wide variety of products including hamburgers, French fries, wraps, breakfast items, shakes, salads, smoothies etc. The direct and indirect materials used in the production of final products include fruits, vegetables, dairy products, fish and meat products, beverages, etc.

Tier II suppliers of the company sells fruits, vegetables, poultry products, dairy products, and coating systems to the Tier I suppliers. Tier I suppliers does the processing work and converts the raw materials to different items like veg and non-veg patties, bakery products, liquid products. These products are further shipped to the McDonalds restaurants. Besides, the beverage companies supply the finished goods to the company’s restaurants. Restaurants further convert these semi-finished items to the final products.