The demand for water in Southern Taiwan has increased significantly in recent years because of industrial growth and increasing living standards. However, due to the financial reasons, only a limited scale of existing surface water facilities can be expanded in a river basin. Therefore, it often requires a suitable strategy to consider the fixed costs and operating costs for expansion. On the other hands, the conjunctive use of surface water and groundwater can enhance the reliability of water supplies by providing independent sources so that research on conjunctive use is important, especially with reference to fixed and operating costs. In light of above reason, resolving the tension between water deficit and economic profit, while ensuring the sustainable development of water resources is very urgent for government authorities. Accordingly, this investigation proposes a process of integrating the system dynamics and impact analysis for evaluating water strategy systematically and quantitatively, with reference to water shortage and economic profit as they pertain to the planning and management of regional water resources.