The simulation-optimization groundwater management model incorporates an aquifer simulation model as constraints in the optimization formulation. In this way, management decisions as well as aquifer simulation are accomplished simultaneously. A representative groundwater management model is one that seeks to identify the least-cost (often total pumping is used as a surrogate for total cost) management strategy to meet specified hydraulic and water quality restrictions. The restrictions dictate the allowable heads, gradients, velocities and concentrations through space and time. The management strategy defines the well locations and rates.
In its most basic form, a groundwater management model has four characteristics: (1) It is stochastic, with the primary source of uncertainty being that associated with the aquifer simulation models; (2) It is nonlinear with respect to the decision variables; (3) It involves both continuous and discrete decision variables, i.e., it is a mixed-integer programming problem; and (4) It requires the solution of a set of (perhaps nonlinear) coupled partial differential equations describing groundwater flow and transport.