Many production environments such as carpet or flat glass manufacturing hav
e linked operations that perform completely different activities. In this p
aper, we consider a two-stage manufacturing process involving a cutting ope
ration, followed by an assignment operation. Raw material is cut to meet pr
oduct demand with minimum trim loss, and assignments are made to minimize r
esource requirements. This cutting stock assignment problem is formulated a
s a large-scale, mixed-integer nonlinear programming problem. We propose a
solution methodology based on decomposition and tree search heuristic strat
egies. We report on extensive computational experiments on a wide range of
problems, and apply statistical techniques to determine significant factors
. For all small-size problems tested, our method found the exact optimal so
lution. For practical-size problems, our method was about two orders of mag
nitude faster and produced solutions that were one-third better than tabu s
earch.