Optimization objective: Minimize shipping cost
Minimizing shipping cost is one of the fulfillment objectives of Sterling Intelligent Promising. When this objective is prioritized, fulfillment decisions are based primarily upon the most cost-effective way to ship orders while still meeting customer expectations.
- Delivery date
- Node carrier applicability
- Carrier schedule
- Ship date
- Dimensional weight
- Carrier rates and zones
- Node calendar
Sterling Intelligent Promising then uses the following factors within shipping cost optimization:
- Large-scale combinatorial optimization.
- Transportation cost and SLA optimization at the time of source node selection.
- Smart weight allocation.
- Smart upgrade and downgrade to optimize cost and customer satisfaction.
- Smart order splitting to reduce costs.
- Order processing (labor) costs.
To calculate the shipping cost associated with each order, Sterling Intelligent Promising uses the Carrier transit rates data.
In this example, a customer purchases 5 products within a single order. The total weight of all of the products in the order is 8 pounds. A single shipment that contains all the items costs $22.56 to ship. However, Sterling Intelligent Promising determines that it is cheaper to send the order in two separate packages: one package that weighs 4.8 pounds and costs $8.34 to ship, and a second package that weighs 3.2 pounds and costs $7.57 to ship. By sending the order in two shipments, you ultimately save $6.65 in shipping costs.