More electric aircraft systems, high power avionics, and a reduction in heat sink capacity have placed a larger emphasis on correctly satisfying aircraft thermal management requirements during conceptual design. Thermal management systems must be capable of dealing with these rising heat loads, while simultaneously meeting mission performance. Since all subsystem power and cooling requirements are ultimately traced back to the engine, the growing interactions between the propulsion and thermal management systems are becoming more significant. As a result, it is necessary to consider their integrated performance during the conceptual design of the aircraft gas turbine engine cycle to ensure that thermal requirements are met. This can be accomplished by using thermodynamic modeling and simulation to investigate the subsystem interactions while conducting the necessary design trades to establish the engine cycle. As the foundation for this research, a parsimonious, transparent thermodynamic model of propulsion and thermal management systems performance was created with a focus on capturing the physics that have the largest impact on propulsion design choices. A key aspect of this approach is the incorporation of physics-based formulations involving the concurrent usage of the first and second laws of thermodynamics to achieve a clearer view of the component-level losses. This is facilitated by the direct prediction of the exergy destruction distribution throughout the integrated system and the resulting quantification of available work losses over the time history of the mission. The characterization of the thermodynamic irreversibility distribution helps give the designer an absolute and consistent view of the tradeoffs associated with the design of the system. Consequently, this leads directly to the question of the optimal allocation of irreversibility across each of the components. An irreversibility allocation approach based on the economic concept of resource allocation is demonstrated for a canonical propulsion and thermal management systems architecture. By posing the problem in economic terms, exergy destruction is treated as a true common currency to barter for improved efficiency, cost, and performance. This then enables the propulsion systems designer to better fulfill system-level requirements and to create a system more robust to future requirements.