Supplier selection aims at determining two common decisions, namely, which suppliers should be selected and how much of any particular order should be split among them. To do so involves many criteria, factors and conditions. One significant factor is transportation cost and its relationship to other parameters, and in particular, inventory cost and lead-time. A model that includes transportation cost is presented. The objective function is to minimize total cost, comprising purchasing, inventory and transportation. Computational results show that transportation cost has a significant impact on the decisions. To determine the optimal order quantity, it has to be traded off with inventory cost, because they conflict. In addition, lead-time can allow inventory cost reduction if the selected suppliers have different lead-times. Application of the proposed model can offer transportation and total cost saving in supplier selection.