It is strongly believed that Video on Demand(VOD) will become one of the most promising services for Broadband Integrated Services Digital Network(B-ISDN). VOD service can be classified into two types of services: Near VOD(NVOD) and Interactive VOD(IVOD). Although VOD network requires many kinds of resources, we only consider video servers, programs. and storages. In the network. some video servers should be installed at some nodes(especially, at the root node for NVOD service). so that each node with video server stores video programs and distributes stored programs to customers. We take into account three kinds of costs related with the above resources: a program transmission cost, a program storage cost, and a video server installation cost. There exists a trade-off relationship among those three costs according to the locations of video servers and the kinds of programs stored at each video server. Given a multi-level VOD network and the total number of programs being served in the network. the resource. optimization problem for providing both IVOD and NVOD services is to determine where to install video servers, and which and how many programs should be stored at each video server, in order to minimize the total cost. In this paper we develop an efficient dynamic programming algorithm to solve the problem. We also implement the algorithm based on two different service policies assumed in this paper.