A research project sponsored by the Illinois State Library had two goals: to develop a set of mathematical models suitable for predicting the impact of alternative library network policies on network preformance, and to demonstrate through series of case studies that the methodology developed could feasibly be applied to real library networking problems. Initial research entailed formulating an understanding of the Illinois Library and Information Network and defining operating policies and network performance. Incorporated in an interactive policy analysis program, the model developed was applied to analyzing resource allocation within individual libraries. Three case studies conducted on the interlibrary loan and reference services of three library systems yielded recommendations and request routing suggestions for each. In addition to development and application of the model, three other efforts were pursued: (1) designing a model-based, integrated online management information system, (2) assessing the impact of automated circulation systems on network operations, and (3) studying reimbursement for services. It was felt that the methodology's versatility was illustrated, and that the feasibility of incorporating the model-based approach into an online management information system was demonstrated. A bibliography lists sources in which the topics discussed in the report are considered at length. (FM)