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Partners' Risk Level Considered CDDM Model for Risk Management of Virtual Enterprise

Risk management in a Virtual Enterprise (VE) is an important issue due to its agility and diversity of its members and its distributed characteristics. In this paper, we develop a partners' risk level considered Constructional Distributed Decision Making (CDDM) model for risk management of the VE. The model has two levels, namely, the top model and the base model, which describe the decision processes of the owner and the partners of the VE respectively. Here we focus on the case of symmetry information between the owner and the partners, and the situation of keeping the partners' risk level in low is considered. A Particle Swarm Optimization (PSO) is then designed to solve the resulting optimization problem. The result shows that the proposed algorithm is effective and the CDDM model can help to reduce the risk of the VE.