One of the major trends in business logistics includes integration of the system elements and its role in the strategic planning process. To enhance the competitive edge, every firms are trying hard to improve their logistics system. This process may involved the firm’s interior adjustment or the cooperation from the outside transportation companies and suppliers. No matter what it may be, its success should be based on the integration of inventory and transportation activities. The integrated logistics model incorporates inventory, transportation, and procurement into a system and its objective is to minimize the total cost. Since the model does not admit a closed form expression for its minimum with respect to order quantity, the optimal solution is not easy being solved directly. Therefore, a two-stage approach is proposed in this paper. Various cases are also conducted using the proposed approach. Initial results suggest that the proposed approach is very satisfactory. Furthermore, in terms of the capability of taking price discounts into account, the two-stage approach outperforms other approaches and is worthy being adopted by firms.