Distribution channel decision is one of the most important decision in supply chain management , because it has direct effect on other marketing decisions. From the point of integration of the supply chain , a bi2level pro2 gramming model is proposed to describe the two2echelon distribution network design problem , which considers the benefits both the network design departments and the customers. It also develops a new heuristic algorithm to solve the model , and at the same time a numerical example is given to illustrate the application of the model and its algo2 rithm.