A method for resource allocation for video encoder to achieve the minimum sequence cost within given resource budgets. Optimal video encoder design by deriving the optimal sequence order and frame type selection is invented. In order to achieve computationally practical resource allocation, the current invention utilizes various encoder model and buffer model. The models allow the optimization procedure to assess the best encoding design without actually performing the computationally expensive encoding. Efficient optimization algorithm is also derived to substantially reduce the computations required to search for the optimal action sequence.