In today's competitive business world, companies face the crucial task of delivering goods on time. In order to benefit from high volumes, distributors (suppliers) try to consolidate deliveries while maintaining a high percentage of on time delivery. Increasing delivery frequencies typically increases suppliers' performance, but it also increases the transportation costs. Finding a suitable middle ground is a challenge confronting many companies throughout various supply chains. This dissertation is a study about the coordination of inventory and transportation decisions in a two-stage supply chain.