In recent years, interest in uneven-aged forestry has been increasing in Britain, particularly for sensitive areas such as recreation and amenity forests. Literature on the economics of uneven-aged forestry is scarce and few operational, uneven-aged forests are available for study. Therefore, in order to quantify the operating costs associated with uneven-aged forestry, a modelling approach was chosen. The resulting model is written in FORTRAN and uses a series of square two-dimensional arrays to represent a block of forest. The block may then be managed by clearfelling and replanting at a specified age, or by a system of group management with a choice of four group sizes. The resulting model was then used to investigate the effect of the following management strategies on operating times: 1. Varying the scale of working (i.e. the group size and forest size) in the uneven-aged forest. 2. Using shortwood or pole-length harvesting systems and a range of machine types within each harvesting system. 3. Varying the length of time taken to transform the structure of the forest from even-aged to uneven-aged. 4. Varying the age of the trees when the transformation from even-aged to uneven-aged structure begins. The results obtained from running the model show that the time taken to carry out an operation is influenced both by the absolute size of the group within the forest block and by the number of groups of that size within the forest block. This fragmentation effect explains why it is difficult to determine the absolute costs of working for a specific group size, because it is the combination of group size, number of groups and forest block size, which determines costs. Most of the results below are based on a range of group sizes from 1.000 ha. to 0.0625 ha., with a block size of 16 ha. Forwarders were penalized when the group size was decreased to 0.0625 ha. (-12% increase over clearfelling), because very small groups do not contain full forwarding loads and a large proportion of total forwarding time is spent manoeuvring into and out of groups. However, the operating times for the three group sizes 1.00 ha., 0.25 ha. and O. 1 1 ha. were very similar indicating that the group size can be quite small before any extra forwarding costs are incurred. On poor sites, the cost differential between the largest and smallest groups is greater. In contrast to forwarding, skidders are most penalized with the decision to adopt an uneven-aged system, and once that decision has been made, there is not a clear increase in costs with decreasing group size. During the transformation period, felling and thinning times in the uneven-aged system are significantly higher than those for the even-aged system, because trees are being harvested prematurely to create the early groups, but this difference is reduced once the forest is transformed. Felling and thinning times increase gradually as the group size decreases, because more care is needed for the felling operation and more time is needed for snedding coarse edge trees. Replanting times for the uneven-aged forest are approximately 8% - 14% higher than replanting times for clearfelling. The results from the model were then analysed using the EXCEL spreadsheet programme to examine, among other things, the cost implications of varying group size, and the relative profitability of uneven-aged and even-aged management. First,optimum ages to begin transformation were found, which varied with the Yield Class and discount rate chosen. Then, the effect of the length of the transformation period was examined and a long transformation period (80-years) was found to be preferable to a short transformation period (40-years). The analysis showed that at high discount rates even-aged and uneven-aged management had similar Net Present Values, but at lower discount rates the even-aged system was preferred. The greatest financial penalty was incurred with adoption of an uneven-aged system, and reducing the group size had relatively little impact on Net Present Values. Other costs and benefits, such as scenic beauty and recreation potential, could not be included in the model, because research relating these values to forest management variables has not been carried out. Therefore, these mostly non-financial factors were discussed for even-aged and uneven-aged forestry, based on a review of the literature.