""For example:
A "Bin1" part is the highest quality and consequently is priced at a premium.
"Bin 2" is slightly lower on performance and priced cheaper.
"Bin 3" is middle of the road on performance and priced cheaper yet.
"Bin 4" is still functional but may fail if exposed to Bin 1 spec's
'Bin 5" is a reject and gets recycled of scrapped""

I agree 100% with this example. I worked in the tire industry for 12 years designing/building tire/wheel balancing equipment for the OE companies. The tires are also graded similar to the above.
When our machines graded a certain brand of tire, our machines gave each tire a grade (A to D, A being the best tire due to the balance recorded). Lets say our customer ran 4,000 of Joe Schmo's A/T tire (exact size, model, etc) thru our machines. The best grade (A) was diverted down the conveyor marked for the OE facilities (Subaru, BMW, etc.). Then grade B would be diverted down the conveyor for the higher end tire stores (BF Goodrich, Goodyear, etc.). Then maybe the grade C would be diverted down the conveyor for the lower end tire stores (Discount Tire, AAA Tire, etc.) then the grade D would either be sent out to the Walmart's of the world. Then the E's would be called bad.
All of the above names and brands are for example only. We were only told where the A grades were delivered too and the rest were usually kept pretty secret unless an employee spilled the beans.

The OE's always got the best graded tire of any brand or size. Then depending on the deal made, certain stores got the B's, C's etc depending on the contract. So the first five tires of the exact brand/size/model name could have gone to five different customers depending on how well each tire was built. The best tire (balance grade) that you can buy is usually on a brand new car.