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.