Abstract:Based on analyzing the existing models of transit and inventory and the characters of a modern logistics distribution network, a nonlinear two-layer distribution network model was put forward from an integrated transit-inventory concept, and a non-linear programming model, with the restriction of capacity and requirement and the objective function of transport cost and distance, was proposed. Furthermore, its optimum solution was proved, and the calculational process for the algorithm was given. Finally, the algorithm was verified by using an actual example. The result shows that the research is useful to establishing the model of multi-phase, multi-line and multi- target logistics distribution.