Allocation of funds to R&D laboratories by a central agency

The problem of allocating funds to a number of R&D laboratories under the control of a federal or central agency is considered, which is a two-stage decision-making process involving the optimal selection of projects within laboratories and allocation of budgets to the laboratories by the federal organization. An analytical method, based upon the concept of “equitable dissatisfaction,” is presented for solving the problem. A numerical example is given to illustrate the application of the model.