Particle swarm optimization algorithm for partner selection in virtual enterprise

Partner selection is a fundamental problem in the formation and success of a virtual enterprise. The partner selection problem with precedence and due date constraint is the basis of the various extensions and is studied in this paper. A nonlinear integer program model for the partner selection problem is established. The problem is shown to be NP-complete by reduction to the knapsack problem and therefore no polynomial time algorithm exists. To solve it efficiently, a particle swarm optimization algorithm (PSO) is adopted and several mechanisms that include initialization expansion mechanism, variance mechanism and local searching mechanism have been developed to improve the performance of the proposed PSO algorithm. A set of experiments have been conducted using real examples and numerical simulation and have shown that the PSO algorithm is an effective and efficient way to solve the partner selection problems with precedence and due date constraints.