In the simulation-optimization approach, a coupled optimization and groundwater flow/transport model is used to solve groundwater management problems. The efficiency of the numerical method, which is used to simulate the groundwater flow, is one the major reason to obtain the best solution for a management problem. This study was carried out to examine the advantages of the Analytic Element Method (AEM) in the simulation-optimization approach, for the solution of groundwater management problems. For this study, the AEM and Finite Difference Method (FDM) based flow models were developed and coupled with the Particle Swarm Optimization (PSO) based optimization model. Furthermore, the AEM-PSO and FDM-PSO models developed were applied in hypothetical as well as real field conditions to address groundwater management problems and the results were compared. For the real field situation, the models developed were applied to the Dore river basin in France to minimize the installation and operational cost of new pumping wells taking the location and discharge of the pumping wells as decision variables. The constraints of the problem were identified with the help of stakeholders and water authority officials. The AEM flow model was developed to facilitate the management model particularly when at each iteration, the optimization model calls for a simulation model to calculate the values of groundwater heads. The results show that, at some points, the AEM-PSO model is efficient in identifying the optimal location of wells and consequently results in optimal costs, sometimes difficult when using the FDM.