In advanced generation seed orchards, tradeoffs exist between genetic gain obtained by selecting the best related individuals for seed orchard populations, and potential losses due to subsequent inbreeding between these individuals. Although inbreeding depression for growth rate is strong in most forest tree species at the individual tree level, the effect of a small proportion of inbreds in seed lots on final stand yield may be less important. The effects of inbreeding on wood production of mature stands cannot be assessed empirically in the short term, thus such effects were simulated for coastal Douglas fir [Pseudotsuga menziesii var. menziesii (Mirb.) Franco] using an individual-tree growth and yield model TASS (Tree and Stand Simulator). The simulations were based on seed set, nursery culling rates, and 10-year-old field test performance for trees resulting from crosses between unrelated individuals and for inbred trees produced through mating between half-sibs, full-sibs, parents and offspring and self-pollination. Results indicate that inclusion of a small proportion of related clones in seed orchards will have relatively low impacts on stand yields due to low probability of related individuals mating, lower probability of producing acceptable seedlings from related matings than from unrelated matings, and a greater probability of competition-induced mortality for slower growing inbred individuals than for outcrossed trees. Thus, competition reduces the losses expected due to inbreeding depression at harvest, particularly on better sites with higher planting densities and longer rotations. Slightly higher breeding values for related clones than unrelated clones would offset or exceed the effects of inbreeding resulting from related matings. Concerns regarding the maintenance of genetic diversity are more likely to limit inclusion of related clones in orchards than inbreeding depression for final stand yield.