Allocation of scarce water for flow augmentation to enhance water quality and other beneficial uses conflicts with other water demands. An analytical model is proposed that is capable of allocating water to competing demands on the basis of economic efficiency. The value of water is determined from the slopes of the benefit functions for water uses and an algorithm, based on the theory of marginal analysis, allocates water after considering the complementary and competitive uses of available water. Operations strategies may be selected and revised throughout the demand period regarding the amount of water to remain in storage, or stored and then released for downstream uses or downstream diversions. Results predict the frequency and magnitude of shortages for each beneficial use of water. Simulation of the hydrologic and economic systems of the proposed Holley Reservoir in the Willamette Valley in Oregon was used to test the effectiveness of the proposed analytical model and the results appear very good. A daily streamflow model and a relationship between reservoir operation and recreational attendance were developed to produce an accurate simulation of the basin. (WRSIC abstract)

Includes appendices. Report sponsored by the Federal Water Pollution Control Administration under Program Number 16090DEA. Includes bibliographical references.