The objective of this study is to establish an actual optimization strategy for the traditional multi-stage distribution system which consists of factory warehouse, central distribution warehouse, and regional distribution warehouse under the basic assumption of distribution system. A minimization algorithm of total operating cost in a multi-stage distribution system was developed by expanding the previously existing algorithm through consideration of additional transportation environment. Alternative non-linear transportation costs for the same travel distance can be applied for the multi-stage distribution system by estimating the corresponding characteristic values through the collection of the actual data representing the change of transportation circumstances.