Feed accounts for over 50% of the total costs on a dairy farm in North America, with feed prices expected to continue to rise in coming years. There is a clear need to improve the feed efficiency of dairy cattle. Studies have shown that there is variation in the amount of feed consumed between animals that have similar production. By exploiting this variation on a genetic level, there is an opportunity for greater and more permanent improvement in feed efficiency. Determining an optimal breeding strategy for improving feed efficiency in dairy cattle would be helpful in reducing feed costs, while maintaining or increasing output. Measuring feed intake can be expensive and time consuming. There are different ways to express feed efficiency, including residual feed intake (RFI) and dry matter intake (DMI). RFI and DMI are genetically correlated with milk yield. Using these genetic correlations, along with phenotypic correlations and heritabilities, an optimal breeding strategy will be created and analyzed using ZPLAN+. ZPLAN+ is a software program that aids in the modeling and calculation of complex breeding scenarios using genomic information. This program will be used to assess the genetic gain, monetary gain, and costs associated with including feed efficiency in a selection index for the Canadian dairy industry. Both RFI and DMI will be simulated as measures of feed efficiency, and the results will be compared with determine which trait is optimal to include in the index. In addition to this work, long-term effects of including feed efficiency in the Canadian selection index on traits of economic interest such as milk yield, fertility and health will be analyzed. The results of this work will provide insight for the Canadian dairy industry as to the best method for including feed efficiency into the existing selection index.