The water industry is heavily regulated, and is in a monopolistic situation, so it is restricted in the charges it can levy, while it has to meet the full demands of its customers. Therefore the economist's approach to optimization, based on the assumption that volume is the sole determinant of cost and revenue changes, cannot be used. Thus an alternative approach is required. The aim of strategic optimization at North West Water Ltd is to produce an operating procedure for the major sources, to meet a declared demand, while maintaining a specified minimum storage volume, at minimum cost.