Resource allocation in universities is analyzed based on economic theory and a theory of organizational behavior in universities. Basic methods of reaching decisions regarding allocation are intuition and numbers and combinations of the two. The intuitive method assumes a university committee can judge its needs. The numerical method employs a measure such as the number of students. Numbers strongly tempered by intuition is the method emphasized. A university's financial situation determines which method is used. Numerical measures of staff needs include contact hours/job analysis, student load, staff/student ratio, and student load by size of department. A formula for computing staffing needs, the Orton line approach, and a comprehensive formula are discussed. Alternative methods for resource allocation are to make comparisons between universities and to make comparisons over time. Two types of reallocation, readjustment and major change, are discussed. It is preferable to base resource allocation on the number of students rather than on a measure of staff work. (SW)