Developed as a companion to the Red Brand Canners (RBC) case, the starting point in this case is the improvement in performance resulting from the optimization approach in the original case. However, RBC’s vice president of operations is concerned about the quality and quantity mix of the most recent tomato crop received from Greenfield Farms (GF). RBC’s preferred quality and quantity mixes differ significantly from the current harvest. To RBC, the issue is how to motivate the supplier to produce a crop more in line with RBC’s needs. Initially, both firms in the B2B section of the supply chain try to find a combination that would be mutually beneficial — an attempt that fails because of conflicts of interest. RBC’s objective might be accomplished by taking a supply chain approach and modifying the delivery contract by an appropriate pricing scheme. The task is to identify and calibrate a pricing scheme that will realize the supply chain’s maximum performance and lead to a stable win-win solution. The derivation of the supply chain optimal prices is carried out by developing and solving a linear optimization model.
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