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In recent years, physically unclonable functions (PUFs) have gained significant attraction in IoT security applications, such as cryptographic key generation and entity authentication. PUFs extract the uncontrollable production characteristics of different devices to generate unique fingerprints for security applications. When generating PUF-based secret keys, the reliability and entropy of the keys are vital factors. This study proposes a novel method for generating PUF-based keys from a set of measurements. Firstly, it formulates the group-based key generation problem as an optimization problem and solves it using integer linear programming (ILP), which guarantees finding the optimum solution. Then, a novel scheme for the extraction of keys from groups is proposed, which we call positioning syndrome coding (PSC). The use of ILP as well as the introduction of PSC facilitates the generation of high-entropy keys with low error correction costs. These new methods have been tested by applying them on the output of a capacitor network PUF. The results confirm the application of ILP and PSC in generating high-quality keys.