Hi Josh,
It probably depends on what you are trying to achieve. Do the Accountants want to keep the stock supplied from the tier 2 supplier on the balance sheet or are they happy to expense it?
If the latter, Vic's solution is looking good.
If the former they will probably need to substantiate this asset, so your virtual warehouse makes a lot of sense... I am assuming that the problem is probably around adjusting the Tier 2 stock levels?
If so, have you thought about ways of using the software to reduce the virtual inventory of Tier 2 goods as you receive the completed goods from the Tier 1 supplier?
This sounds like Outside Operations (see WO processing), so consider using Work Orders with WO Completions to "receive the Tier 1 inventory Item" (with Outside Operation PO's to pay Tier 1 supplier and backflush to reduce the tier 2 stock) - [having the Tier 2 Item in BOM of Tier 1 Item also makes sense to the costing of Tier 1 Item]
OR
Purchase Orders for Tier 1 with a negative free good of Tier 2 Item (not sure if that works in your version?)
OR
Not sure if PO kits support negatives?
Hope this helps with some ideas to explore