This study buildsup a numerical model for smart well production, and the model has thefunctionality of downhole monitoring and control. We implement three smart well productionstrategies in a water flooding environment. From the comparison of production data with theconventional segment well production, we can conclude that: (1)Both Reactive and Proactive Controls can increase oil production and decrease waterproduction, and bring about an improvement of the ultimate NPV. A combined production ofReactive and Proactive Controls can bring the more improvement in NPV and it is the optimalproduction strategy. (2)The economic improvement of the smart well production strategies happens in the middleand late period of production, and their economicstrength is the most obvious in the middle period.