Optimal capacity provisioning in communication networks with random demand

In this paper, we present a stochastic model for optimizing bandwidth capacity provisioning in communication networks (CNs) with the loss rate constraint and profit shortfall risk. The model is proposed for offline traffic engineering optimization, which takes a centralized view of bandwidth allocation, performance control and risk of network profit shortfall. First, we introduce a loss rate constraint in the CN optimization model and derive the optimal capacity of the bandwidth allocation with the loss rate constraint. Then, we use mean-variance approach to analyze the risk averseness in CNs. Finally, numerical results are shown to reveal the impacts of the loss rate constraint and the risk averseness on the CNs performance.