Optimal Budget Allocation for University Research and Publication Agenda through Integer Programming

Abstract

For the past few years, government-funded universities in Malaysia faced an uphill battle to strategize their management budget due to significant budget cut by the Malaysian Government. One portion of the budget will be spent towards achieving the key performance indicators (KPIs) set by the universities to achieve their annual targets. Unfortunately, some universities set up their specific strategies to achieve the KPIs without ample consideration to the limited available resources where less attention is channeled to the cost of achieving the KPIs. Setting priorities and making decisions on allocation and reallocation of resources based on the direction of the strategies must be executed with transparency and accountability and will be of great importance. In this paper we illustrate how integer programming was applied to allocate budget based on the KPIs set for one of the government-funded Malaysian universities’ (U-XYZ’s) research and publication agenda. Two models were developed and successfully solved. The first model was to determine the total budget needed if all the KPIs were to be achieved while the second model was to distribute the allocated budget set by U-XYZ, for all the activities planned for the agenda. The result showed that in order to achieve the target, U-XYZ has to increase its budget allocation by RM2.164 million. Otherwise, U-XYZ can only expect to obtain 1.578 out of 1.593 points that is required to be achieved.