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

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.

Stochastic partner selection for virtual enterprises: a chance-constrained approach

“…In this case, risk is generally viewed as highly related to the financial health and performance of the candidate enterprise, the political stability and economic situation of the region where it is located, and market fluctuations (Niu, Ong, and Nee 2012). Huang et al (2013) study the coordination of risk management in a fashion and textiles supply chain organised as a VE, using a distributed decision-making mechanism with an incentive scheme to establish a practicable strategic partnership. Ruiz-Torres, Mahmoodi, and Zeng (2013) consider the optimal allocation of demand across a set of suppliers, given the risk of supplier failures, and considering contingency planning in the decision process.…”

Mechanism Design of Fashion Virtual Enterprise under Monitoring Strategy

“…In the field of economics, agents are often assumed to be risk averse. In addition to fuzzy evaluation [20,21,24,25], case study approach [26], almost all of the papers described risk-aversion by a concave utility function or a mean-variance tradeoff which is widely used in theoretical studies. This paper uses downside risk measure to describe the risk.…”

Research on the Production Scheduling Optimization for Virtual Enterprises

“…Due to the difference of the factor of the characteristics of the market opportunities and core enterprise defects, consideration of core enterprise during the partner selection is also different. Overall, the time, costs and risk are factors to be considered basically in every virtual enterprise [21]. Therefore, this paper considers the impact of the virtual enterprise partner selection factors from three aspects of time, cost, and risk.…”