Optimization penalties
An optimization penalty is when two or more ship nodes have the same cost to serve, a distance penalty and delay penalty tiebreaker cost are applied to determine a selection.
A distance penalty cost is applied during order optimization when two or more ship nodes have the same cost to serve. Then a delay penalty is when any ship node faces a delay beyond the agreed upon SLA, a delay penalty cost is applied to it. Delays might be due to extra backlog at a node, carrier transit time, or other factors, resulting in the inability to adhere to an SLA.
Distance penalty cost
A distance penalty cost is applied during order optimization when two or more ship nodes have the same cost to serve.
The distance penalty tiebreaker is computed as a factor of the distance of the node from the destination address. This tiebreaker is a small value. It is only applied when two or more ship nodes have the same cost to serve. Otherwise, the closest node is selected when all other costs are equal.
Sterling Intelligent Promising uses the distance attribute that is received at the ship node level to calculate the distance penalty cost. If this attribute is not available for a node, an average distance might be calculated by using the minimum and maximum distance among all candidates, or from inventory information about the nodes.
Delay penalty cost
The delay penalty (also known as a delay cost) is applied to each order line for the node. It is based on a preconfigured value equivalent to 2 USD in the currency that is configured for the tenant. In a scenario where none of the carriers at a ship node can meet the SLA days, the carrier that charges the lowest shipping cost for the order is selected.
For more information about the delay penalty cost in real-time scenarios, see Scenario: Delay penalty.