Answer
An S, S-1 inventory policy means that as soon as we sell one we place an order for another.
This is typically used for long lead time, capital intensive, low demand service parts in industries such as aerospace.
Scenario
We start with 10 service parts in stock. We sell one and immediately place an order for another. We now have 9 in stock and one in flight. We sell another and immediately place an reorder. We now have 8 in stock and 2 in flight. We sell another and immediately place a reorder. We now have 7 in stock and 3 in flight.
As we can see we what we have on hand and what we have in flight will always equal 10.
