A risk management approach to resilient network design

This paper considers the problem of where a survivability technique should be deployed in a network based on managing risk given a limited financial budget. We formulate three novel risk management resilient network design techniques: (1) minimize the maximum damage that could occur in the network, (2) minimize the maximum risk in the network and (3) minimize the root mean squared damage. The first two approaches try to minimize the damage/risk from the worst case failure scenario, where as the third technique minimizes the variability of damage across all failure scenarios. Numerical results for a sample network show the tradeoffs among the schemes.