Solution Targeted At Millions of Dollars in Savings Through Supply Chain Optimization

MINNEAPOLIS, Minn. - October 12, 2000 - Retail applications leader Retek Inc. (NASDAQ: RETK) today announced an agreement with ILOG (NASDAQ: ILOG; EURO.NM) under which ILOG optimization software will be combined with Retek's proven, patented predictive technology to help provide millions in savings for Retek customers. ILOG CPLEX will be embedded within Retek's supply chain products for retail, and the products are available immediately. "Retail is a unique industry with unique problems, and we are delighted to be bringing our optimization expertise to address them through our partnership with Retek, one of the leading players in this space," said Todd Lowe, general manager and executive vice president, ILOG Value Chain Management division. "The combined solution of Retek and ILOG should demonstrate the tremendous cost-savings potential of optimization technology in the retail industry."

"The scientists at Retek Labs, a special division of Retek based in Atlanta, have been working for eight years to take the most sophisticated predictive and optimization technologies and apply them to solve the challenging problems in the retail supply chain," said Jeremy Thomas, Retek Chief Technical Officer. "We anticipate the partnership with ILOG will bring an unrivalled supply chain solution to the retail industry while producing an estimated millions of dollars in savings for supply chain customers through the use of optimization."

Predictive Optimization in the Retail Supply Chain: The Competitive Combination
ILOG CPLEX will be offered in a unique set of Retek replenishment optimization products, adding value throughout the supply chain. These include the Retek Replenishment Optimization, Markdown Optimization and Promotional Optimization products, along with the leading causal forecasting solution, Retek Demand Forecasting (RDF).

Identifying the Retail "Unknown"
The identification of key patterns is key to addressing "unknowns." "Retailers are often like detectives, following the sometime random trails of customer, promotion and location attributes that impact on inventory behavior," stated Jeremy Thomas, Chief Technical Officer at Retek Inc. "Retek predictive technology is unique in focusing on retail data, which is different than data from manufacturing or any other industry. Retek predictive models work with sku/store or sku/channel/customer data, which is a much more granular level of specific detail than any other technology available. Using neural networks, context vectors and time series technology, Retek solutions help retailers to identify subtle patterns that have a profound impact on inventory, replenishment, markdowns and promotional activity."

Retek believes customers will realize significant savings by having the tools to anticipate and control costs more efficiently. The new combination of predictive analysis and optimization technology is seen as the key.

Optimization Addresses Unique Retail Challenges
The goal of replenishment is to minimize the combined cost of holding inventory and cost of lost sales. While other replenishment methods offer limited control over the cost equation, they present the retailer with a trade-off dilemma: either reduce inventory levels at the expense of lost sales, or reduce lost sales -- stock outs -- at the expense of bloated inventories. ILOG's optimization capability within Retek's existing and future retail supply chain products is expected to enable automatic management of these parameters using retailer cost data, including cost elements associated with carrying inventory and lost sales, making the trade-off dilemma moot.

About Retek Inc.
Retek Inc. delivers high-capacity, full-function business infrastructure exclusively for the changing world of retail. Retek's solutions deliver improved decision-making capabilities and operational efficiencies by enabling supplier network orchestration, multi-channel selling, and retail CRM. Retek solutions are available on client platforms, through retail.com -- Retek's Marketplace for the Retail Community -- and via electronic exchanges operating Retek's Retail Server. Retek's customers include A&P, Tesco, Best Buy, AnnTaylor, Brooks Brothers, Family Dollar Stores, Kohl's Department Stores, Selfridges, Eckerd Corp. and The Home Shopping Network. For more information, visit Retek's web site at http://www.retek.com or call. 1-888-61-RETEK. Retek can be contacted in Europe at +44 20 7872 5795.

About ILOG
Dually headquartered in Paris and Mountain View, Calif., ILOG is the world's leading supplier of C++ and Java software components. ILOG's embeddable optimization, visualization and business rules software components dramatically shorten development times for enterprise software applications in the supply chain, telecommunications, transportation and financial services industries. In addition to optimization applications where ILOG enjoys significant market share, the company is taking an active role in the e-business software-components market. Visit http://www.ilog.com for additional information.

Retek and retail.com are trademarks of Retek Inc. ILOG and CPLEX are registered trademarks of ILOG. All other names may be trademarks of their respective owners.