This article describes an economic modeling strategy using a computer program developed specifically for academic institutions that can serve as a component of strategic planning for an academic physical therapy program. Within the framework of strategic planning, economic modeling can assist stakeholders in allocating resources. Economic modeling can enable physical therapy program directors, faculty, and other stakeholders to make allocation decisions on a macro (ie, program) or micro (ie, course) basis, realizing that cost is only one factor in a cost/value decision-making process. Academic physical therapy programs can utilize this information to make informed decisions about resource allocations that will most effectively meet their strategic planning goals. This type of planning and modeling is particularly important in the current climate for physical therapy education in which programs are facing challenges in mission alignment, student enrollment, and resource availability. Key Words: Academic strategic planning, Economic modeling. INTRODUCTION Economic modeling can be used by academic programs to enhance strategic planning. Although academic institutions have used both generic and specific economic modeling strategies in the past,1 this particular strategy was developed approximately 10 years ago specifically for academic units and has not been widely disseminated.2 Therefore, this article begins with a brief history of this particular model. It was introduced to the Indiana University (IU) system in 1990-1991 and was implemented first on the Indiana University-Purdue University at Indianapolis (IUPUI) campus, which is the home of the IU School of Allied Health Sciences (SAHS). The SAHS houses the university's physical therapy program, as well as programs in clinical laboratory science, cytotechnology, emergency medical services, health information administration, health sciences education, histotechnology, nutrition and dietetics, occupational therapy, radiological sciences, and respiratory therapy. Twenty-one schools on the IUPUI campus have chosen to use this model, including the SAHS and the schools of nursing, social work, dentistry, business, law, and liberal arts. This model has also been disseminated on a limited basis to other institutions of higher education, both public and private. On the IUPUI campus, the Office of Planning and Institutional Improvement (OPII) offers schools and other academic units such as programs the opportunity to use economic modeling to analyze their costs and make decisions regarding future resource allocation. The model provides schools and programs with the ability to: 1. define unit outcomes (programs, activities, services), 2. identify costs associated with the unit outcomes, 3. develop a cost model using activity-based costing methods, 4. determine the effects of funding increases or decreases on outcomes, 5. develop a revenue model focusing on financial analysis, 6. develop a financial planning system linking cost and revenue, 7. identify tasks that are duplicative or unnecessary, and 8. improve efficiency and effectiveness. 3 The ability to define and identify the costs associated with unit outcomes means that an individual academic program, such as physical therapy, can determine how resources are being allocated within the program. For example, personnel costs can be calculated along with administrative, equipment, and supply costs. This figure can then be compared with the revenue generated by the program with regard to tuition dollars, student fees, and external sources of funding to determine whether or not the program is cost-effective in its present configuration. On an individual basis, a faculty member's time can be allocated to various teaching responsibilities (specific courses), scholarship/research activities (funded and unfunded), service activities (funded and unfunded), and clinical activities. …