In order to investigate the planning and management strategies of Chou-Shui alluvial fan groundwater resource, the MODFLOW computer code was firstly applied to simulate the 3-D groundwater flow pattern of the area, and find the suitable model of hydro-geological structure and in situ hydraulic parameters. The method of response matrix was then adapted to simulate the development management plan area. The hydro-geological data, for instance, the distribution of wells, the discharge stress and the change of discharging plan, were used to calibrate the groundwater development conditions, in order to obtain the best unit pluse value and response matrix by MODMAN computer code. Then the combined simulation-optimization approach using the code LINDO is applied to get the groundwater resource management model. Several simulation cases on discharge and recharge management models are performed and discussed.