Expertise from the fields of hydrology and operations research was combined to produce a 'State Water-Planning Model'. Begun in September 1968, completion is scheduled for June 1972. The mathematical model, intended for solution by digital computer, is being designed for the Montana State Water Resources Board, and will be operated in conjunction with their data bank. The combination is envisioned to provide a system which can be interrogated to determine quickly and accurately the likely effects on the State's water regime of proposed changes in management practices. This report details the methodology that was formulated to develop a State Water-Planning Model, the first phase of which encompassed the whole of Montana and included all portions of those river basins contained within its political boundaries. First, a correlation model; second, a balance model; and third, a peripheral model were developed to illustrate general and procedural guidelines. (WRSIC abstract)