A stochastic computer model was developed to simulate individual pigs in a hierarchical breeding system. The bioeconomic model was designed as a tool to facilitate the evaluation of selection, culling, and management strategies for a three-tiered breeding structure. Events such as mating, farrowing, and selection occurred weekly. Variables included number of pigs born alive, survival rate from birth to weaning, average daily gain and backfat at 110 kg, number of pigs weaned, feed per gain, days from weaning to 110 kg, age at puberty, and growth rate and weight of sows and service boars. Also included were probabilities of conception, return to estrus by week, survival, involuntary culling, male infertility, and unacceptable conformation. Variables important for selection were determined by breeding value, individual and maternal heterosis, parity, size of birth litter, sex, age of dam, genetic and environmental relationships between variables, and common litter, permanent, and random environmental effects. Variables derived from selection variables were computed by regression using phenotypic relationships between all variables. Also, a random environmental effect was added to predicted performance. Means and variances of variables differed between genetic lines. Production costs included feed, non-feed operating, fixed, and replacement stock costs. Income included market animals, culls, and replacements sold to lower tiers. Effects of changes in backfat on market value and sow maintenance feed costs were not modeled. An example is given to illustrate model output.