The cutting stock problem (CSP) is one of the significant optimization problems in operations research and has gained a lot of attention for increasing efficiency in industrial engineering, logistics and manufacturing. In this paper, new methodologies for optimally solving the cutting stock problem are presented. A modification is proposed to the existing heuristic methods with a hybrid new 3-D overlapped grouping Genetic Algorithm (GA) for nesting of two-dimensional rectangular shapes. The objective is the minimization of the wastage of the sheet material which leads to maximizing material utilization and the minimization of the setup time. The model and its results are compared with real life case study from a steel workshop in a bus manufacturing factory. The effectiveness of the proposed approach is shown by comparing and shop testing of the optimized cutting schedules. The results reveal its superiority in terms of waste minimization comparing to the current cutting schedules. The whole procedure can be completed in a reasonable amount of time by the developed optimization program.ª 2014 Production and hosting by Elsevier B.V. on behalf