Two paradigms characterize much of the research in the Information Systems discipline: behavioral science and design science The behavioral-science paradigm seeks to develop and verify theories that explain or predict human or organizational behavior The design-science paradigm seeks to extend the boundaries of human and organizational capabilities by creating new and innovative artifacts Both paradigms are foundational to the IS discipline, positioned as it is at the confluence of people, organizations, and technology Our objective is to describe the performance of design-science research in Information Systems via a concise conceptual framework and clear guidelines for understanding, executing, and evaluating the research In the design-science paradigm, knowledge and understanding of a problem domain and its solution are achieved in the building and application of the designed artifact Three recent exemplars in the research literature are used to demonstrate the application of these guidelines We conclude with an analysis of the challenges of performing high-quality design-science research in the context of the broader IS community

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Design science in information systems research

Criticism and the Growth of Knowledge. Edited by I. Lakatos and A. Musgrave. Pp. viii, 282. £3·50, paperback £1. 1970. (Cambridge University Press.)

Truth and method

Publisher Summary This chapter reviews the supply chain coordination with contracts. Numerous supply chain models are discussed. In each model, the supply chain optimal actions are identified. The chapter extends the newsvendor model by allowing the retailer to choose the retail price in addition to the stocking quantity. Coordination is more complex in this setting because the incentives provided to align one action might cause distortions with the other action. The newsvendor model is also extended by allowing the retailer to exert costly effort to increase demand. Coordination is challenging because the retailer's effort is noncontractible—that is, the firms cannot write contracts based on the effort chosen. The chapter also discusses an infinite horizon stochastic demand model in which the retailer receives replenishments from a supplier after a constant lead time. Coordination requires that the retailer chooses a large basestock level.

Supply Chain Coordination with Contracts

Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price contract. This paper studies revenue-sharing contracts in a general supply chain model with revenues determined by each retailer's purchase quantity and price. Demand can be deterministic or stochastic and revenue is generated either from rentals or outright sales. Our model includes the case of a supplier selling to a classical fixed-price newsvendor or a price-setting newsvendor. We demonstrate that revenue sharing coordinates a supply chain with a single retailer (i.e., the retailer chooses optimal price and quantity) and arbitrarily allocates the supply chain's profit. We compare revenue sharing to a number of other supply chain contracts (e.g., buy-back contracts, price-discount contracts, quantity-flexibility contracts, sales-rebate contracts, franchise contracts, and quantity discounts). We find that revenue sharing is equivalent to buybacks in the newsvendor case and equivalent to price discounts in the price-setting newsvendor case. Revenue sharing also coordinates a supply chain with retailers competing in quantities, e.g., Cournot competitors or competing newsvendors with fixed prices. Despite its numerous merits, we identify several limitations of revenue sharing to (at least partially) explain why it is not prevalent in all industries. In particular, we characterize cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract. Additionally, revenue sharing does not coordinate a supply chain with demand that depends on costly retail effort. We develop a variation on revenue sharing for this setting.

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Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations

From the Publisher:
Quantitative models and computer based tools are essential for making decisions in today's business environment. These tools are of particular importance in the rapidly growing area of supply chain management. This volume is a unified effort to provide a systematic summary of the large variety of new issues being considered, the new set of models being developed, the new techniques for analysis, and the computational methods that have become available recently. The volume's objective is to provide a self-contained, sophisticated research summary - a snapshot at this point of time - in the area of Quantitative Models for Supply Chain Management. This volume can serve as a graduate text, as a reference for researchers and as a guide for further development of this field.

Quantitative Models for Supply Chain Management

Managing supply chain inventories: a multiple retailer, one warehouse, multiple supplier model

There is still considerable doubt and even anxiety among simulation modelers as to what the methodologically correct guidelines or procedures for validating simulation models should be. Epistemically, the approaches one finds in the simulation literature run the gamut from objectivist to relativist with shades in between. At present in the philosophy of science, there appears to be a convergence toward a nonalgorithmic but discursive and nonrelativistic view of the argumentation involved in warranting scientific theorizing. The present paper attempts to give a description of the various philosophical positions as well as to summarize their problems and the kinds of evidentiary arguments they would each allow in arriving at defensible simulation models. From the debate, we attempt to set out a perspective that frees the practioner to pursue a varied set of approaches to validation with a diminished burden of methodological anxiety. Reciprocally this perspective does not let the modeler off of the hook but rather converts the validation problem into an ethical problem in which the practitioner must responsibly and professionally argue for the warrant of the model.

Validation in Simulation: Various Positions in the Philosophy of Science

In the previous chapters, we focused largely on quantitative approaches to solving Supply Chain Management (SCM) problems including such issues as: inventory management, supply contracts, information flow, product variety, and international operations. In this chapter, we will broaden our focus to include other approaches to SCM problems, by presenting a broad taxonomy for understanding SCM research.

Ram Ganeshan

Papers

Quantitative Models for Supply Chain Management

Managing supply chain inventories: a multiple retailer, one warehouse, multiple supplier model

Validation in Simulation: Various Positions in the Philosophy of Science

A Taxonomic Review of Supply Chain Management Research

Sustainable Supply Chains