Abstract. This paper presents a method to establish the objective function of a network flow programming model for simulating river–reservoir system operations and associated water allocation, with an emphasis on situations when the links other than demand or storage have to be assigned with nonzero cost coefficients. The method preserves the priorities defined by rule curves of reservoir, operational preferences for conveying water, allocation of storage among multiple reservoirs, and transbasin water diversions. Path enumeration analysis transforms these water allocation rules into linear constraints that can be solved to determine link cost coefficients. An approach to prune the original system into a reduced network is proposed to establish the precise constraints of nonzero cost coefficients, which can then be efficiently solved. The cost coefficients for the water allocation in the Feitsui and Shihmen reservoirs' joint operating system of northern Taiwan was adequately assigned by the proposed method. This case study demonstrates how practitioners can correctly utilize network-flow-based models to allocate water supply throughout complex systems that are subject to strict operating rules.