Multicriteria partner selection in virtual organizations with transportation costs and other network interdependencies

In this correspondence, we study how the selection of partners in a virtual organization (VO) can be assisted through mixed-integer linear programming (MILP) models. Additionally to fixed and variable costs, we present extensions that accommodate transportation costs, capacity risk measures, and interorganizational dependencies such as the success of past collaboration. Experiences from a real case study indicate that these models are helpful in VO decision making; computational experiments suggest that the models are tractable. In general, the MILP models are potentially applicable to a variety of portfolio selection problems.