A heuristic approach for capacity expansion of packet networks

We address the problem of expanding transmission capacity of an existing packet network over a multiperiod planning horizon, the objective being low total cost of expansion. Discrete capacity choices, interaction with routing decisions, and economy of scale in the cost of capacity make it extremely difficult to decide when, where and how much capacity to add. A fast heuristic solution method is developed based on the well established Flow Deviation routing algorithm. The heuristic begins by making myopic expansion decisions, which are then subsequently adjusted to account for economies of scale in the cost of capacity. Heuristic solutions are compared to a benchmark which approximates the real cost function by its linear lower envelope. Since the number of possible expansion plans is an exponential function of the number of edges, capacity choices, and periods in the planning horizon, a fast heuristic allows one to look beyond small problems at more realistically sized ones.