Question

Firm A manufactures brake pads, a component of a braking system, and sells them to Firm B, who sells braking systems used in vehicles. Firm A is best described as a:

(A) Tier 2 supplier
(B) Tier 1 supplier
(C) manufacturer
(D) retailer
(E) distributor

Answer 1

Answer:

Letter B is correct. Tier 1 supplier.

Explanation:

A tier 1 supplier is one whose manufacturer usually markets its products to a large distributor who can operate both wholesale and retail, where the products are sold directly to the end consumer.

This is what happens in this issue, where company 1 manufactures and sells brake pads for company 2 to produce brake systems that are used in vehicles.