A computer model was used to investigate the costs and returns from selecting pigs on growth rate and backfat thickness. The cases considered were (1) a closed herd with all parents selected from within the herd; and (2) a base herd where only females were homebred. In a closed herd, the cumulative discounted benefits over 15 years from a single cycle of selection exceeded costs for a large number of breeding strategies. The most profitable age structure was to use boars for 6 months and sows for two litters, but profits were reduced by only 5% when sows were kept for five litters, assuming a discount rate of 20%. The internal rate of return of a typical gilt selection program in an open herd is about 33% p.a. Using a discount rate of 20% p.a., the value of this gilt selection program is equivalent to about 16% of the selection response possible in a closed herd, and 17% of the total returns possible in the open herd when boars are obtained from a nucleus herd. The effects of selecting a proportion of the total boar requirements of the open herd from within the open herd itself, changes in the parental age structure in the open herd and the merit of individual nucleus boars are discussed.