A circular area known as the Zone of Supply encompasses each major base building and Supply Depot. You can view the Zone of Supply by clicking on the associated icon near the mini-map. Any attached regiment within this area is in supply.While in supply, attached units within a regiment regain lost health, one by one, and units that were lost in action are replaced with new units at no cost. Resupplying units is preferable to replacing entire regiments for one simple reason: replacement regiments come as Recruits with zero experience. The bonuses granted to more experienced regiments make it worthwhile to retreat badly beaten regiments back to the nearest base rather than letting them be wiped out and replaced. If enemies come close to a building that provides a Zone of Supply, then the Zone of Supply deactivates until the enemy is forced back. It is hard to conduct business when bullets are flying through the walls!



Source: Axis and Allies RTS Official Manual