The development proceeds in four phases: (1) specification of the breeding, production and marketing system; (2) identification of sources of income and expenses; (3) determination of biological traits influencing income and expense; (4) derivation of the economic value of each trait, based on discounted gene flow methods. As an example, a breeding objective is developed for a pure breeding herd from which male calves are marketed at 9 months of age and surplus heifers are sold at 15 months of age