What is meant by "policy-based routing"?

Policy-based routing refers to a routing method where decisions are made based on defined policies set by the network administrator rather than solely relying on the destination address of the packet. This approach allows for greater control over how traffic is routed through the network by considering various parameters, such as source address, application type, or the type of connection.

With policy-based routing, administrators can enforce specific routing behaviors based on organizational policies. For example, traffic from a certain department might be routed through a particular gateway to ensure compliance with security protocols or to optimize performance for critical applications. This flexibility enables networks to be more adaptive to varying business needs and improves overall network management.

The other choices don't fully encompass the concept of policy-based routing. Routing that solely relies on destination address overlooks the ability to direct traffic based on other criteria, while physical examination of each packet is not needed for policy-based routing. Lastly, routing determined by connection type is too limited and does not incorporate the broader range of policies that might influence routing decisions.