What mathematical optimization actually is, why it is important for companies, and why it’s so damn complicated

Optimization is the process of enhancing operational efficiency and performance by identifying the best-fit solution for a specific business scenario. It typically involves setting a well-defined goal, such as reducing operational costs or increasing revenue, while considering many factors and navigating multiple constraints.

In the context of logistics, for example, a company must determine the optimal combination of shipments while considering factors such as delivery times, costs, and availability of drivers and goods. Constraints can be soft, such as preferable delivery dates, which may allow flexibility albeit with penalties, or hard, such as insufficient inventory levels, which cannot be violated.

There are many ways these factors can be combined to reach the desired outcome, and optimization tools aim to find the optimum, or near-optimum, solution in order to maximize efficiency.

Modeling

This phase involves translating the business problem into mathematical formulas, which are then converted into a constraint matrix for the solver algorithm to process and find the optimal solution. Formulating business problems mathematically is a highly complex and time-consuming task. Additionally, transforming these formulas into a constraint matrix generally requires programming skills.

Solving

At this stage, the solver algorithm attempts to find an optimal feasible solution based on the constraints defined earlier. However, in most real-world problems, current solver algorithms on the market can take hours or even days to find a solution – and sometimes, they don’t succeed at all. This often happens when there are too many hard constraints, making an “optimal” solution virtually unattainable.

The most frustrating part is that when a feasible solution cannot be found, these algorithms provide no explanation, offering no insight into which constraints could be adjusted to achieve a solution. They operate like a “black box” that simply rejects the input, leaving us to start over from scratch.

How Rulex revolutionizes mathematical optimization

Rulex has just released a new advanced optimization tool that revolutionizes the traditional approaches, reducing time and complexity in both the modeling and solving phases. A part of Rulex Platform’s suite, Build & Solve is a powerful optimization task where business experts can define the problem along with its hard and soft constraints (Build), then apply an advanced algorithm to find a solution (Solve), all within a reasonable time frame and without the need for advanced technical skills.

In the Modeling (or Build) phase, no mathematical formulas are needed. Users can define problems using logical syntax within familiar spreadsheets, while the Build & Solve task itself automatically generates the constraint matrix from the business data and spreadsheets.

This is already a significant advantage. But there’s more.

In the Solving phase, the Build & Solve algorithm is extremely rapid. While traditional tools may take hours or even days, Rulex can find a feasible solution within seconds or minutes. If a solution is not found on the first attempt, the tool identifies which specific constraints are preventing a feasible solution, thus allowing experts to quickly assess and address the issue. This approach significantly reduces the need for repeated, time-consuming calculations and accelerates the path to a viable solution.

In addition to offering all the essential tools for gathering and pre-processing data, Rulex Platform also provides comprehensive capabilities for post-processing and visualization, allowing results to be presented to end-users exactly as and where they need them.

Real-world applications of Build & Solve

Build & Solve is not some future proof-of-concept; it’s already in production at numerous global companies, particularly in supply chains and manufacturing, where it is efficiently optimizing processes as we write. One of its most successful applications is in scheduling, ensuring that tasks and actions within a plan align with specific business objectives.

Scheduling optimization:

The tool was used to develop a solution for a Fortune 50 company, optimizing production efficiency by simultaneously tackling both product and packaging planning. This was a highly complex challenge, given the diverse constraints – ranging from managing different batch sizes to coordinating multi-stage orders and machines that cannot operate simultaneously.

The company’s experts were able to define the problem using logical syntax in spreadsheets, avoiding the need for complex mathematical formulas. Thanks to the tool’s user-friendly interface and rapid processing, the solution was deployed in under a month. Now, production planning can be optimized in less than 10 minutes, significantly outperforming traditional manual methods in both speed and accuracy, resulting in a threefold increase in production efficiency.

More in-house optimization tools

While Build & Solve serves as a general purpose optimization tool, Rulex also offers specialized tasks for specific supply chain and logistics challenges, including warehouse and transport optimization. With these tools, the problem framework is already established; users simply need to customize it with their specific case details and data.

Avoid getting stuck down rabbit holes

Tailored around business needs, Build & Solve offers extremely rapid and efficient problem resolution, so you don’t get stuck down rabbit holes.

Do you have a business challenge that feels insurmountable? Bring your case to us, and together we’ll find a solution. Schedule a free consultation with one of our experts today!

What is decision intelligence?

Decision intelligence (DI) combines cutting edge technologies such as AI and mathematical optimization with human expertise to create a cohesive framework for answering key questions, such as: What will be the outcome if I take this action today, given the current context?; What actions should I take now to maximise the likelihood of achieving my goals?; What strategies can I employ to reduce costs?

Listed in their top 10 strategic technology trends of 2024, Gartner defines DI as a “practical discipline that improves decision making by explicitly understanding and engineering how decisions are made, and outcomes evaluated, managed and improved by feedback”. DI is, therefore, no different from the decision flow that you and your team create when making a decision during a meeting.

But, is DI just a buzzword? McKinsey predicts that 70% of businesses will rely on decision intelligence by 2030. So, it may be worth having a further look into the topic.

How is decision intelligence different from business intelligence?

The first question that may arise when hearing about DI is how it differs from business intelligence (BI) – the practice of presenting relevant, historical business information and querying data in visual formats. Decision intelligence can be seen as BI 2.0, diving much deeper into the inner workings of data.

Suppose you want to analyze your company’s sales. While business intelligence reveals past sales trends, decision intelligence goes further by explaining why sales fluctuated and identifying which factors were less influential. This insight helps address business challenges more effectively. In other words, DI is an action-oriented practice that provides the additional knowledge needed to elevate your business operations to new levels.

How decision intelligence platforms work

Decision intelligence platforms orchestrate large volumes of data into a unified view, leveraging cutting-edge technologies like eXplainable AI to support intelligent decisions, and then executing and automating decision flows, saving you time.

These platforms must be designed to scale solutions easily and incorporate human expertise and feedback. The key is that decisions made using decision intelligence platforms should not only be superior in quality, accuracy, and effectiveness but also augmented by a hybrid system of advanced technologies and human judgement. To facilitate this human-machine collaboration, transparency is crucial, offering clear insights into decision-making processes, so users can understand and evaluate any automated decisions.

“Inform with accurate data, decide with advanced and explainable tools, and repeat with automation” is the mantra of good decision intelligence. Listed among the top decision intelligence platforms by Gartner on the market, Rulex is an innovative platform system where these three phases are all integrated into the same workspace. This means you can create solutions to improve decision-making starting from your in-house data and following the entire process step by step.

Collecting information with agility

Call it what you want; we call it data agility, meaning the capacity to collect, aggregate, and harmonize data smoothly from any source and format. But Rulex Platform’s agility capabilities do not stop there.

It also ensures your data is of top quality through a combination of data quality technologies, from traditional data cleansing to rule-based validation and AI-driven self-healing. Not only can these multiple approaches literally tackle any data quality issue, but, equally important, they can be handled and applied by citizen developers, without the need to constantly stress the IT team for help and support.

A full decision intelligence toolkit

When data preparation is done, let the fun begin. Decision making is not only about data: it’s about reaching your organization’s goals, with data as a key ingredient.

Rulex provides a comprehensive suite for an outcome-based approach. Whether optimizing logistics, making informed credit scoring decisions, or gaining insights into your product landscape, virtually any solution can be built in Rulex Platform. Additionally, its WYSIWYG graphical interface and transparent technology enable users without technical skills to design solutions independently.

Native eXplainable AI – Generates output in the form of understandable if-then rules, leading to peak performance while ensuring transparency, compliance, and adherence to ethical AI standards. Rulex’s proprietary XAI technology has resulted in multi-million-dollar savings for global corporations in areas such as customer loyalty and fraud detection.

Mathematical optimization – Finds optimal solutions for complex business scenarios by managing intricate physical and logical constraints defined in common spreadsheets. Global supply chains use this tool to minimize costs and maximize revenues in areas such as deployment, dock, and transport optimization, and even simultaneously optimizing multiple areas like warehousing and work shifts.

Business rule engine – Serves as a powerful tool for defining, enhancing and applying business rules to data. It allows users to write business rules in a simple Excel file using intuitive syntax. It has been used for advanced master data validation, lending and credit risk management, and strategic supplier diversification.

What-if scenario simulator – Forecasts the behavior of complex processes and recommends precise modifications to achieve desired outcomes without costly real-life experiments. It has been employed to reduce energy consumption, predict equipment maintenance, and improve retention strategies.

AutoML – Simplifies and accelerates data analytics through a user-friendly, guided workflow. By automating time-consuming tasks like data preparation, pre-processing, and feature selection, it facilitates seamless experimentation with multiple machine learning models. It is widely used by global financial organizations for applications such as credit scoring, wealth management, product cross-selling, and up-selling.

Decisions are human, repetition can be automated

Once you have built your decision flow and are satisfied with it, the final step is to automate it. Automation ensures smooth data flow across systems, providing up-to-date analytics, and streamlining company processes, ultimately saving time. Rulex Platform provides end-to-end workflow automation, covering everything from data collection and integration to analysis and reporting.

Finally, while many software solutions struggle to integrate with existing infrastructure without causing major disruption, Rulex excels. Both the cloud and server versions of Rulex offer a comprehensive catalog of REST APIs, facilitating smooth connections with multiple systems and services. To further enhance collaboration and efficiency, Rulex Platform provides all the necessary features to support the creation of DevOps pipelines, integrating the software with existing tool-chains.

Empowering your decisions

Making decisions is not new; we, as humans, have done it for millions of years. However, the uncertainty of today’s market and geopolitical landscape demands a quicker pace. Making faster and better decisions is crucial for maintaining a competitive edge. Rulex Platform can be your trump card, empowering your company while seamlessly integrating with your existing infrastructure and systems.