This paper presents an application distributed simulation to the evaluation of virtual enterprises. Each company or candidate can use a simulation of its facilities to determine if it has the capability to perform its individual function in the virtual enterprise. Then, these simulations can be integrated into a distributed simulation of the complete enterprise, and used to predict the viability and profitability of the proposed product collaboration. In this paper, a prototype distributed simulation for such a purpose is presented. First, information flows as well as material flows among members in a virtual enterprise are identified using IDEFØ, a formal function modeling method. Sequences of the identified functions are then presented using the finite state automata formalism. These interactions are then implemented for a commercial simulation package. Finally, a distributed simulation composed of three individual simulations is successfully tested across platforms over both the internet and the local area network.