Matching Supply and Demand : The Value of a Second Chance in Producing Seed Corn

This paper analyzes the supply chain for hybrid seed corn in which there are two sequential production periods with random yields before demand occurs. We show that the problem of managing the supply chain can be viewed as a multiperiod optimization model that is easily solved. By examining data that represents actual costs, prices, and yields encountered in the seed corn industry, we gain some insight into the value that the second production period provides. Using a representative sample of hybrids from a major seed corn producer, we show that margins could be enhanced considerably by using the model