Water resources systems are characterized by multiple interdependent components that produce multiple economic, environmental, ecological, and social impacts. Planners and managers working to improve the performance of these complex systems must identify and evaluate alternative designs and operating policies, comparing their predicted performance with desired goals or objectives. These alternatives are defined by the values of numerous design, management, and operating policy variables. Constrained optimization together with simulation modeling is the primary way we have of identifying the values of the unknown decision variables that will best achieve specified goals and objectives. This chapter introduces optimization and simulation modeling approaches and describes what is involved in developing and applying them to define and evaluate alternative designs and operating policies.