Model and algorithm for the risk management of Virtual Enterprise based on the Bilevel Programming

In view of the Virtual Enterprises´ characteristics, such as the complexity of the composition and operation with stage, the idea of Bilevel Programming is applied to the management of the Virtual Enterprises´ risks, a Bilevel Programming risk management model is developed, and describes how to reserve the best risk-controlling funds according to the forecasted risks in different operation stages from the beginning, and how to take best measures to control the risk and the investment of each stage especially the specific risk which is possible at a certain operation stages. To solve the model, a genetic algorithm is developed. The computing results on simulative examples show the effectiveness and feasibility of the model and algorithm for the risk management of Virtual Enterprises.