A new approach has been developed for the arrangement of rectangular pieces in plates for the guillotine-cutting problem as encountered in ship production and similar manufacturing processes. The algorithm is quite novel in the sense that instead of making preliminary specifications and ignoring all the alternative arrangements, as is the case for most of the current models, it selectively considers feasible arrangements by eliminating the majority of the probable arrangements that render the problem insolvable. Intermediate steps of the algorithm produce results which cannot be obtained through integer programming. Losses are distributed to the minimum number of plates. The number of arrangement plans is also minimized. Overall the solution of the problem has been drastically simplified to allow even hand calculations instead of long computer runs. (C) 2004 Elsevier Ltd. All rights reserved.