Optimization objectives

Every time an order is sent to IBM Sterling Fulfillment Optimizer with Watson, it performs multi-objective optimization to determine the best option for fulfilling it.

Fulfillment Optimizer considers the following business objectives when optimizing orders to lower fulfillment costs and use inventory more efficiently:
  • Minimizing shipping cost
  • Balancing node capacity
  • Avoiding stockouts
  • Avoiding markdowns
  • Minimizing processing cost

You set weights for each of these objectives based on your business goals. Then, Fulfillment Optimizer incorporates those weights into the following equation to determine the best option for fulfillment based on your business priorities:

(Shipping cost × Optimization weight) + (Capacity penalty × Optimization weight) + (Stockout avoidance cost × Optimization weight) - (Markdown avoidance benefit × Optimization weight)