This paper reports on a study exploring master students' ability to apply their knowledge when solving an internal pricing problem in a supply chain. Analyses of 33 negotiation progress reports and 8 recordings of discussions demonstrate that most of the students were not able to apply relevant concepts and models to guide their handling of the task. The main reason for the variability in performance was the significant differences in the students' general problem-solving abilities. Most students did not perform a thorough task analysis or develop a solution strategy before they met for negotiations, and they did not keep track of their task performance. The implications for teaching are highlighted, and directions for further research are proposed.