In the water balance of reservoir system, evaporation plays a crucial role particularly so for the reservoir systems of smaller size located in the semi-arid or arid regions. Such regions are most often characterized by significant seepage losses from reservoirs, besides evaporation losses. Usually, in the optimization of a reservoir system, it is a common practice to assume evaporation loss either as some constant value or as negligible. Such assumptions, however, may affect the results of reservoir optimization. This is demonstrated in this study by a case study in the optimal scheduling of Pilavakkal reservoir system in Vaipar basin of Tamilnadu, India. For modeling reservoir losses, many models are available, of which, Penman combination model is most commonly used. In this study, an alternative approach based on Genetic Programming (GP) is proposed. The results of GP and Penman model for both evaporation loss estimation and reservoir scheduling are compared. It is found that while GP and Penman combination model performs equally well for estimating evaporation losses, GP is also able to model seepage losses (or other losses from reservoir) to a much better degree. It is also shown the reservoir scheduling does get influenced based on how the reservoir losses are modeled in the reservoir water balance equation.