abstract: This thesis develops a low-investment marketing strategy that allows low-to-mid level farmers extend their commercialization reach by strategically sending containers of fresh produce items to secondary markets that present temporary arbitrage opportunities. The methodology aims at identifying time windows of opportunity in which the price differential between two markets create an arbitrage opportunity for a transaction; a transaction involves buying a fresh produce item at a base market, and then shipping and selling it at secondary market price. A decision-making tool is developed that gauges the individual arbitrage opportunities and determines the specific price differential (or threshold level) that is most beneficial to the farmer under particular market conditions. For this purpose, two approaches are developed; a pragmatic approach that uses historic price information of the products in order to find the optimal price differential that maximizes earnings, and a theoretical one, which optimizes an expected profit model of the shipments to identify this optimal threshold. This thesis also develops risk management strategies that further reduce profit variability during a particular two-market transaction. In this case, financial engineering concepts are used to determine a shipment configuration strategy that minimizes the overall variability of the profits. For this, a Markowitz model is developed to determine the weight assignation of each component for a particular shipment. Based on the results of the analysis, it is deemed possible to formulate a shipment policy that not only increases the farmer's commercialization reach, but also produces profitable operations. In general, the observed rates of return under a pragmatic and theoretical approach hovered between 0.072 and 0.616 within important two-market structures. Secondly, it is demonstrated that the level of return and risk can be manipulated by varying the strictness of the shipping policy to meet the overall objectives of the decision-maker. Finally, it was found that one can minimize the risk of a particular two-market transaction by strategically grouping the product shipments. / Dissertation/Thesis / M.S. Industrial Engineering 2011