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This paper presents a two-stage flexible dynamic decision support based optimal threat evaluation and defensive resource scheduling algorithm for multi-target air-borne threats. The algorithm provides flexibility and optimality by swapping between two objective functions, based on preferential and subtractive defense strategies as and when required. To further enhance the solution quality, we outline and divide the critical parameters used in Threat Evaluation and Weapon Assignment (TEWA) into three broad categories (Triggering, Scheduling and Ranking parameters). Proposed algorithm uses a variant of many-to-many Stable Marriage Algorithm (SMA) to solve Threat Evaluation (TE) and Weapon Assignment (WA) problem. In TE stage, Threat Ranking and Threat-Asset pairing is done. Stage two is based on a flexible dynamic weapon scheduling algorithm, allowing multiple engagements using shoot-look-shoot strategy, to compute near-optimal solution for a range of scenarios. Analysis part of this paper presents the strengths and weaknesses of the proposed algorithm over an alternative greedy algorithm as applied to different offline scenarios.