A Method for Virtual Enterprise Risk Assessment

Abstract

Recently, various studies (outsourcing, business to business electronic commerce, etc.) have been done toward realization of virtual enterprises which can collect the core competence from wide range of companies. However, it may be hard that this enterprise type proliferates in the true sense, if a reasonable decision criteria is not established answering the question "Is it really all right if we outsource our process?" It is the problem of risk assessment that outsourced process cannot gain the expected output.

This paper proposes a solution about this problem. We assume that a certain capacity vector is requested to execute a certain process. We also assume an outsourcing candidate has a capacity vector, but the value of the vector is not a definite value but it has a probability distribution. We assume it a multi-dimension normal distribution. We propose a risk assessment method defining the risk as the probability that the candidate's capability does not exceed the requested capacity. Then we can assess the outsourcing risks.