Consider a Packaged Milk Products Supply Chain

question 96

Multiple Choice

Consider a packaged milk products supply chain. A lumber company provides wood to a paper mill, who supplies cardboard to a container manufacturer, who supplies containers to the milk products manufacturer. The lumber company is:

• A) a tier one supplier.
• B) a tier two supplier.
• C) a tier three supplier.
• D) a tier four supplier.
• E) not in the supply chain.

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Definitions:

Agency Cost

The costs arising from conflict of interest between principals (owners) and agents (managers), including monitoring expenditures and the costs of structuring operations to minimize issues.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Claim Dilution

The reduction in the likelihood of recovery or the value of each creditor’s claim as a result of an increase in the number of claimants or claims against the same debtor or asset.

Secured Loan

A loan that is backed by collateral, providing the lender with assurance that the loan will be repaid.