Develops a method for dealing with the computation of stochastic reservoir behaviour which is to be called the "divided interval technique", which offers better accuracy. An outline of storage behaviour analysis techniques followed by a literature review on storage theory precedes an account of probabilistic reservoir models. Many methods suffer from inaccuracies because of dicretetization. This study develops a technique to overcome this problem, and its efficacy is exemplified. This improved method is used to to carry out a parametric study of reservoir behaviour for a specific inflow distribution and discrete time interval. The annual discrete storage model with two-parameter log-normally distributed inflows is used and a family of working curves is derived.