Multi-period capacity expansion for a local access telecommunications network

In this paper, we examine a multi-period capacity expansion problem for a local access telecommunications network with a tree topology. Capacity expansion is realized through the installation of concentrators at the nodes and cables on the links of the network. Clearly, the installation of concentrators reduces the need for additional cables, and conversely. The goal is to find the least cost alternative to satisfy the demand. A heuristic approach is proposed to solve this problem, where local installation decisions at each node are propagated in the network. This information is then used to adjust prices that guide the decision process from one iteration to the next, until a fixed point is reached. Numerical results are reported on problem instances based on different cost and demand structures.