One of the main issues in a paper mill is the minimization of trim loss when cutting master reels and stocked reels into reels of smaller required widths. The losses produced in trimming at a paper mill are reprocessed by using different chemicals which contributes to significant discharge of effluent to surface water and causes environmental damage. This paper presents a real-world industrial problem of production planning and cutting optimization of reels at a paper mill and differs from other cutting stock problems by considering production and cutting of master reels of flexible widths and cutting already stocked over-produced and useable leftover reels of smaller widths. The cutting process of reels is performed with a limited number of cutting knives at the winder. The problem is formulated as a linear programming model where the generation of all feasible cutting patterns determines the columns of the constraint matrix. The model is solved optimally using simplex algorithm with the objective of trim loss minimization while satisfying a set of constraints. The solution obtained is rounded in a post-optimization procedure in order to satisfy integer constraints. When tested on data from the paper mill, the results of the proposed model showed a significant reduction in trim loss and outperformed traditional exact approaches. The cutting optimization resulted in minimum losses in paper trimming and a lesser amount of paper is reprocessed to make new reels which reduced the discharge of effluent to the environment.