Certification in Supplier Diversity Practice Exam

Which of the following is an example of a tier two supplier?

1. A supplier that provides products directly to the main company

2. A supplier that sources products from the main company

3. A supplier that supplies tier one suppliers

4. A supplier that operates outside of the organization

The correct answer is: A supplier that supplies tier one suppliers

A tier two supplier is defined as a supplier that provides goods or services to a tier one supplier, rather than directly to the main company or organization. In a supply chain, tier one suppliers are those that have a direct contractual relationship with the primary business. Meanwhile, tier two suppliers support these tier one suppliers by supplying them with necessary products, components, or services that are then integrated into the tier one supplier's offerings before being delivered to the main company. This relationship highlights how tier two suppliers are essential in ensuring that tier one suppliers can meet the requirements of the main organization. They play a critical role in the larger ecosystem of supply chains, enhancing efficiency and supporting the production processes of tier one suppliers, which subsequently affects the main company. The other options do not accurately reflect the definition of a tier two supplier. A supplier providing products directly to the main company would be categorized as a tier one supplier. Sourcing products from the main company doesn't fit the description of a tier two supplier, as it implies a reverse flow of goods. Lastly, a supplier operating outside of the organization does not inherently indicate its tier classification in relation to the primary organization and does not clarify the supplier's role within the supply chain context.