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In distributed mobile systems, communication cost and disconnections are major concerns. In this paper, we address replica placement issues to achieve improved performance for systems supporting mobile transactions. We focus on handling correlated data objects and disconnections. Frequently, requests and/or transactions issued by mobile clients may access multiple data objects and should be considered together in terms of replica allocation. We discuss the replication cost model for correlated data objects and show that the problem of finding an optimal solution is NP. We further adjust the replication cost model for disconnections. A heuristic "expansion-shrinking" algorithm is developed to efficiently make replica placement decisions. The algorithm obtains near optimal solutions for the correlated data model and yields significant performance gains when disconnection is considered. Experimental studies show that the heuristic expansion-shrinking algorithm significantly outperforms the general frequency-based replication schemes.