In this paper the feedback loop mechanisms that are inherent in the management of water supply systems were identified based on the system dynamics modeling methodology. As a result, a system dynamics (SD) computer simulation model that can be used to aid efficient management of water supply systems was developed. The developed SD model can be used to predict operating conditions of water supply systems including the effects of pipe maintenance on the entire system. The developed model is consisted of water supply, pipe maintenance and water supply business finance model. The operation and maintenance data from a study water supply system were used to verify the model and to predict the past and future operating conditions of the system. The policy leverage that greatly affects the operating condition was evaluated by the sensitivity analyses for the operational indices due to changes in the exogenous variables. It was found that while the pipe maintenance related exogenous variables had great effects on the leakage and conditions of pipes, they did not have great effects on the major operational indices such as revenue water ratio. It is considered that the social costs due to leaks and pipe breaks and the corresponding mechanism of propagation of the costs must be modeled to better evaluate the effects of pipe maintenance on the operational conditions of water supply systems.

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