The sequent-peak procedure is a well-known simplistic algorithm for determining the storage capacity requirement for a reservoir [Thomas and Fiering, 1963]. It has also been extended to cascaded multireservoir systems in analyses based on a dynamic programming approach [Murray and Weissbeck, 1980]. But the procedure suffers from serious limitations: 1. Storage-dependent losses or releases cannot be included in the calculations. 2. It cannot be used for complex multireservoir systems. 3. It cannot be used when less than maximum reliability (percentage of periods in which target demand is met) is desired; specification of the shortfall that may be allowed in any failure year is, therefore, out of the question. 4. It cannot be used when the reservoir operating policy is not the standard one. (A standard operating policy (SOP) is one under which the seasonal release is equal to the target release or all the available water, whichever is less.) On the other hand, the procedure has the significant advantage of not being limited by the number of years and seasons of inflows used in the analysis, a factor that is crucial in determining practical solvability in analyses based on the commonly used linear programming (LP) formulation [Loucks et al., 1981, pp. 236-238]. Further (at least in the case of single or cascaded multireservoir systems), it enables the analyst to tackle problems with significantly nonlinear objective functions with the help of direct-search optimization methods. Some attempts have been made to overcome the shortcomings mentioned above. Modifications have been easily made to enable calculation of capacity for different levels of reliability [Loucks, 1976]. Tejada-Guibert [1978] has presented an iterative algorithm for calculating storage capacity at maximum reliability in which evaporative losses are accurately included and also a half-interval search procedure for determining the storage required for a desired reliability. None of these algorithms, however, is able to provide for specification of the extent of shortfall that may be allowed in any failure or "short" year.In this paper we present two simple algorithms that overcome limitations (1) and (3) completely. In part I we describe an algorithm that is based on the sequent-peak procedure but takes into considerations torage-dependenlto ssesa s "exactly" as they are included in the standard LP formulation. (Although they are called "evaporation losses" hereinafter, it should be noted that they could be any kind of storagedependent losses or withdrawals.) In part II we show how this improved algorithm may be used in a procedure that would enable one to calculate the active storage capacity requirement when the reliability norm specifies not only the maximum number of failure years but also the allowable shortfall in any failure year. Finally, we indicate how the procedure may be able to overcome limitations (2) and (4) to some extent.