A methodology for design and evaluation of redundancy allocation algorithms based on prime algorithms is proposed for memory devices with spare elements. The methodology can be applied to any memory device with spare elements. It allows the design of simple but effective Built-in Redundancy Allocation (BIRA) algorithms working "on-the-fly" with BIST. The methodology allows also reasonable trade-off between repair coverage and hardware/time complexity during the implementation. A basic toolset for design and evaluation of BIRA algorithms based on the proposed methodology is developed and preliminary results of experiments on the application of the tool for Self-Test and Repair (STAR) type SRAM memories are adduced.