The way that inflation has created pressure points on quantity of resouces and quality of outcomes in postsecondary education is examined, along with the situation of the chemistry department of the University of Montreal. Data from the chemistry department for 1971-80 are used to assess the impact of inflation on various objects of expenditures and to explore scenarios that are likely to hinder or save quality and vitality. A percentage breakdown of operating expenses and a composite price index for each of five major expenditure items were calculated: salaries and benefits, travel and entertainment, supplies, services, and maintenance and equipment. It was found that in the last nine years the total operating expenses of the University of Montreal have more than tripled compared with fiscal base year 1971-72. During the same period, the growth rate of salary money was slightly higher than that of the total expenses and of any single expenditure subcategory. For the chemistry department, indices were generally lower than those arrived at for the institution, with the exception of the services and maintenance and equipment subcategories. However, it is noted that inflation was the main factor in the evolution of chemistry indices, whereas not only rising costs but also substantial growth must be considered at the institutional level. While salary and benefit money are expected to occupy about 80 percent of the institutional operating expenses and inflation will continue to erode the limited maneuver margin contained in the remaining 20 percent, the most promising scenario to preserve the current level of quality appears to be a systematic and sustained effort through priority setting and continued monitoring or workloads, section size, and other areas. A bibliography is appended. (SW)