Order routing determines which inventory sources to use to fulfill order items. Inventory may be sourced from one of your facilities or from one of your external vendors (i.e. Dropship, JIT, and 3PL vendors). The Order Routing options allow you to modify the default routing logic to best serve your needs. There are two different order routing modes: Preferential and Cost-based. This article details the options for cost-based routing (CBR).
The CBR mode allows you to modify the routing logic to minimize fulfillment costs. The CBR options take into account factors such as item depreciation and customer expectation. These let you model both actual costs (e.g. payment to the shipping carrier) and perceptual costs (e.g. the potential loss of the customer if a shipment is late) into your routing logic to use the most cost-effective routing options available. See below for an explanation of the CBR options available.