A method of managing an operating state of an electrified powertrain includes a controller identifying a plurality of available operating regions defined by at least one available operating state of the powertrain, each operating region representing a distinct range of operating conditions. The available operating regions include an avoidance region defining a plurality of unwanted operating conditions and separating a first allowable operating region from a second allowable operating region such that the first and second allowable operating regions are noncontiguous. The method identifies at least one ideal operating condition in each of the available operating regions, determines a preferability factor and stabilization factor for each of a current and each of the ideal operating conditions, and arbitrates the factors to identify one of the current and ideal operating conditions as an optimized operating condition to produce a required parameter value.