Abstract: In order to reduce the negative influences of "Trade-off" between inventory cost and transportation cost, the problem of transportation mode selection when there is a limitation of loading capacity is studied. By referring to the economic order quantity (EOQ) model, an economical transport quantity method is also proposed, of which inventory cost and transportation cost are both taken into account. Study shows that the optimal cost of the integrated system of warehousing and transportation is a piecewise function which depends on logistics demand rate; when the loading capacity is infinite, the scale transportation effect of the railway outperforms that of road transportation; when the loading capacity is a constant, the relationship of logistics demand rate and loading capacity, unit transportation cost and inventory cost, should be considered comprehensively when selecting a transportation mode. The proposed method provides a theoretical reference for the carrier to choose the transportation mode.

Key words: integration of warehousing and transportation, economical transport quantity, multi-modal transportation