Revenue optimization of telecommunication networks

The optimal routing and dimensioning of circuit-switched networks operating with call revenues is examined, and F.P. Kelly´s (1988) model is extended in two directions. First, the formulation is transformed in such a way that the optimality equations are significantly easier to derive, and another interpretation of Kelly´s induced costs is given. Alternative routing is introduced, the corresponding values for the induced costs and the net path revenue are given, and it is shown that the optimal routing is given by an equal-revenue rule. It is also shown that the dimensioning aspect is easily decomposed into individual link dimensioning problems if the fixed-point multipliers are known. Some results for networks operating with state protection are presented to show that the method also works quite well for networks with heterogeneous traffic