An analytical framework for supply network risk propagation: A Bayesian network approach

•A Bayesian network model of risk propagation in a supply network is developed.•The inter-dependencies and connectedness of various risks are modeled.•A framework of measures is derived from this model.•Simulation study demonstrates how the measures are used in a supply network setting. There are numerous examples of supply chain disruptions that have occurred which have had devastating impacts not only on a single firm but also on various other firms in the supply network. We utilize a Bayesian Network (BN) approach and develop a model of risk propagation in a supply network. The model takes into account the inter-dependencies among different risks, as well as the idiosyncrasies of a supply chain network structure. Specific risk measures are derived from this model and a simulation study is utilized to illustrate how these measures can be used in a supply chain setting.