Increasing costs and competitive business strategies are pushing sawmill enterprises to make an effort for optimization of their process management. Organizational decisions mainly concentrate on performance and reduction of operational costs in order to maintain profit margins. Although many efforts have been made, effective utilization of resources, optimal planning and maximum productivity in sawmill are still challenging to sawmill industries. Many researchers proposed the simulation models in combination with optimization techniques to address problems of integrated logistics optimization. The combination of simulation and optimization technique identifies the optimal strategy by simulating all complex behaviours of the system under consideration including objectives and constraints. During the past decade, an enormous number of studies were conducted to simulate operational inefficiencies in order to find optimal solutions. This paper gives a review on recent developments and challenges associated with simulation and optimization techniques. It was believed that the review would provide a perfect ground to the authors in pursuing further work in optimizing sawmill yard operations.