This paper deals with the problem of determining the optimal inventory-transportation policy of the idealistically simple inventory-transportation system with the following assumptions: (1) The system consists of a single central warehouse and a single local warehouse, (2) The planning horizon is finite, (3) Demand rate is fixed costant, and so forth. Developed is the algorithm by which to identify the optimal inventory policy which minimizes the total cost incurred to the system over the given finite planning horizon. A sample numerical example is presented along with a discussion of the possible applications of the approach used n the algorithm.