Virtual Enterprise Risk Management Using Artificial Intelligence

Virtual enterprise (VE) has to manage its risk effectively in order to guarantee the profit. However, restricting the risk in a VE to the acceptable level is considered difficult due to the agility and diversity of its distributed characteristics. First, in this paper, an optimization model for VE risk management based on distributed decision making model is introduced. This optimization 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. In order to solve the proposed model effectively, this work then applies two powerful artificial intelligence optimization techniques known as evolutionary algorithms (EA) and swarm intelligence (SI). Experiments present comparative studies on the VE risk management problem for one EA and three state-of-the-art SI algorithms. All of the algorithms are evaluated against a test scenario, in which the VE is constructed by one owner and different partners. The simulation results show that the algorithm, which is a recently developed SI paradigm simulating symbiotic coevolution behavior in nature, obtains the superior solution for VE risk management problem than the other algorithms in terms of optimization accuracy and computation robustness.