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Mathematical Problems in Engineering
Volume 2013 (2013), Article ID 931690, 11 pages
http://dx.doi.org/10.1155/2013/931690
Research Article

A Coordination of Risk Management for Supply Chains Organized as Virtual Enterprises

1College of Information Science and Engineering, Northeastern University, State Key Laboratory of Integrated Automation of Process Industries, Shenyang, Liaoning 110819, China
2Northeastern University at Qinhuangdao, Qinhuangdao 066004, China

Received 21 July 2012; Accepted 6 January 2013

Academic Editor: Xiaohang Yue

Copyright © 2013 Min Huang et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

As a new management mode, great attention has been paid to virtual enterprise (VE). While there is much research material on risk management of VE, a relationship perspective on owner and partner performance assessment and management can bring an added dimension. The coordination of risk management in fashion and textiles (FTs) supply chain organized as a VE is studied in this paper. The aim of this study is to find proper decision mechanisms that can improve the overall performance of risk management for the whole VE as well as each member. For the risk management problem in VE, a centralized mechanism is given as the base case, and then a distributed decision-making (DDM) mechanism with incentive scheme is introduced to establish a practicable strategic partnership. Under the DDM mechanism, a relationship performance definition that incorporates the financial dimension is investigated. For the two resulting optimization problems, a particle swarm optimization (PSO) algorithm is designed. In the numerical examples, the study shows that the DDM mechanism with incentive scheme can improve the overall benefit of risk management beyond the centralized one. Additionally, sensitivity analysis is conducted with respect to the bonus parameter, and suggestions are made for further research.