Abstract:The manufacturer usually needs to evaluate the earnings and the product delivery default risk to decide whether to accept the product order after receiving the product order. In reality, the product delivery default risk may propagate downstream along the supply chain. However, how to evaluate the product delivery default risk considering the risk propagation so as to make the correct order acceptance decision is a research topic that needs to be concerned. In this paper, a decision making method for order acceptance considering the risk propagation is proposed. Firstly, according to the structure and characteristics of the supply chain, the fault tree including multiple suppliers is constructed aiming to the two cases leading to the product delivery default, i.e., below-standard product quality and product on backorder. Then, the probabilities of basic events in the fault tree are estimated. Furthermore, the probability of the product delivery default event is calculated according to the principle of fault tree analysis(FTA). On this basis, the prospective earnings of accepting the order are calculated and the order acceptance decision is made. According to the assessment result, the manufacturer can decide whether to accept the product order. Finally, a practical example is used to illustrate the feasibility and potential application of the proposed method.