The public water demand for water in Taichung, in the central part of Taiwan has increased significantly in recent years owing to the development of the Central Taiwan Science Park (CTSP) and its increasing living standards. Therefore, how to plan appropriate strategies to avoid water deficit in the future is an urgent problem for water resources agency. In addition, due to limited government budget, the financial costs of strategy intervention, consisting of constructional costs and operating costs, are another major concern. In light of this reason, the main purpose of this project is to develop a strategy that could potentially lessen the impact of water deficit while taking the implementation costs into consideration. This project proposes a methodology of combining system dynamics and impact analysis to evaluate water strategy systematically and quantitatively. It also develops a system dynamics model that includes the concept of water resources planning and management. This model can effectively distribute water to supply area in every time step. Moreover, the major work of impact analysis is to design problematic indexes (sustainable indexes) that indicate the seriousness of the problem. By using the proposed problematic indexes, we can evaluate the interactive impact of selected strategy and then select win-win strategies accordingly.