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About Decision Optimization

A brief introduction to Decision Optimization.

What is Decision Optimization?

Decision Optimization gives you access to IBM's world-leading solution engines for mathematical programming and constraint programming. People frequently use the term optimization to mean making something better. Although optimization often makes things better, it means a lot more than that: optimization means finding the most appropriate solution to a precisely defined situation. It is a sophisticated analytics technology, also called Prescriptive Analytics, which can explore a huge range of possible scenarios before suggesting the best way to respond to a present or future situation.

Decision optimization

  1. The situation is generally a business problem, such as planning, scheduling, pricing, inventory, or resource management.
  2. Whatever the problem is, resolving it starts with the optimization model, which is the mathematical formulation of the problem that can be interpreted and solved by an optimization engine. The optimization model specifies the relationships among the goals, limits, and choices that are involved in the decisions. But it is the input data that makes these relationships concrete. An optimization model for production planning, for example, can have the same form whether you are producing three products or a thousand. The optimization model plus the input data creates an instance of an optimization problem.
  3. Optimization engines (or solvers) apply mathematical algorithms to find a solution, a set of decisions that achieves the best values of the goals and respects limits imposed. The optimization engine implements specialized algorithms that have been developed and tuned to efficiently solve a large variety of different problems. Decision Optimization uses the IBM CPLEX and CP Optimizer engines that have been proved powerful in solving real-world applications.
  4. The solution that emerges from the solver details the recommended values for all of the decisions that are represented in the model. Equally important are the metric values that represent the targets. These values measure the quality of the solution in terms of the business goals.
  5. All of this can be made available to business users via a complementary business application. Usually, the solution and goals are summarized in tabular or graphical views that provide understanding and insight.