A novel discrete network design problem formulation and its global optimization solution algorithm

•A novel discrete transportation network design problem formulation is developed.•It is a general model and includes conventional CNDP and DNDP as particular cases.•A global optimization solution method is developed to solve the problem.•The solution approach converges to the exact global optimum solutions.

Conventional discrete transportation network design problem deals with the optimal decision on new link addition, assuming the capacity of each candidate link addition is predetermined and fixed. In this paper, we address a novel yet general discrete network design problem formulation that aims to determine the optimal new link addition and their optimal capacities simultaneously, which answers the questions on whether a new link should be added or not, and if added, what should be the optimal link capacity. A global optimization method employing linearization, outer approximation and range reduction techniques is developed to solve the formulated model.