Analysis of bandwidth allocation on end-to-end QoS networks under budget control

This paper considers the problem of bandwidth allocation on communication networks with multiple classes of traffic, where bandwidth is determined under the budget constraint. Due to the limited budget, there is a risk that the network service providers can not assert a 100% guaranteed availability for the stochastic traffic demand at all times. We derive the blocking probabilities of connections as a function of bandwidth, traffic demand and the available number of virtual paths based on the Erlang loss formula for all service classes. A revenue/profit function is studied through the monotonicity and convexity of the blocking probability and expected path occupancy. We present the optimality conditions and develop a solution algorithm for optimal bandwidth of revenue management schemes. The sensitivity analysis and three economic elasticity notions are also proposed to investigate the marginal revenue for a given traffic class by changing bandwidth, traffic demand and the number of virtual paths, respectively. By analysis of those monotone and convex properties, it significantly facilitates the operational process in the efficient design and provision of a core network under the budget constraint.