This study deals with the dynamic transportation-inventory model for a single product from which the optimal procurement quantities and the transportation modes are determined simultaneously over a finite planning horizon. Moreover, it covers the situation where quantity discounts are applied to the transportation cost as well as the purchase cost and disposals of the excess are possible at the end of each period. For a relevant mathematical model formulated, the theorems and properties of an optimal solution are discussed to present the efficient algorithm. A numerical example is solved to illustrate the algorithm developed.