AbstractThe two inventory echelons under consideration are the depot,D, andktender shipsE1, …,Ek. The tender ships supply the demand for certain parts of operational boats (the customers). The statistical model assumes that the total monthly demands at thektenders are stationary independent Poisson random variables, with unknown means λ1, …, λk. The stock levels on the tenders, at the heginning of each month, can be adjusted either by ordering more units from the depot, or by shipping bach to the depot an excess stock. There is no traffic of stock between tenders which is not via the depot. The lead time from the depot to the tenders is at most 1 month. The lead time for orders of the depot from the manufacturer isLmonths. The loss function due to erroneous decision js comprised of linear functions of the extra monthly stocks, and linear functions of shortages at the tenders and at the depot over theNmonths. A Bayes sequential decision process is set up for the optimal adjustment levels and orders of the two echelons. The Dynamic Programming recursive functions are given for a planning horizon ofNm