Which business operates by using labor and machinery to convert raw materials into finished products?

The correct answer is a manufacturer because this type of business specifically focuses on transforming raw materials into finished goods through the application of labor and machinery. Manufacturers play a critical role in the supply chain by taking basic inputs, which may include various types of raw materials, and using industrial processes to create products ready for sale to wholesalers, retailers, or directly to consumers.

In contrast, other types of businesses serve different functions within the supply chain. Retailers sell finished products directly to consumers but do not engage in the conversion of raw materials. Wholesalers act as intermediaries between manufacturers and retailers, purchasing bulk quantities of finished products and reselling them, while suppliers typically provide the raw materials or components that manufacturers need for their production processes. Each of these businesses plays an important role, but it is the manufacturer that is directly involved in the conversion process of creating finished products.