| Summary: | In vehicle industry, it has been trends towards focusing on pull-basedsystems and elimination of waste (Lean), which decrease the tied-up capitallevel in the focal factory. Research by Holweg & Miemczyk (2002)showed that the relevant supply chain has low inventory level in the focalfactory, but at upstream and especially downstream; the tied-up capitallevel is dramatically higher in comparison to the focal factory.By conducting research and extensive literature reviews, this volatilityof tied-up capital level has been studied and analysed with regard topush and pull systems. As the three main causes of this unevenness; bullwhipeffect, CODP position in supply chain and intensity level of supplierrelationship have been identified and explained.As a practical solution for decreasing the tied-up capital level of finishedvehicles, implementation of centralised warehouse structure hasbeen suggested and discussed.Moreover, as an application of game theory in logistics, iterated prisoners’dilemma has been discussed as the base for a progressive relationshipwith suppliers (upgrading to win-win game) which is requisite for the successof pull-based supply chains. === Program: BSc in Industrial Engineering - International Business Engineering
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