Network Capacity Allocation in Service Overlay Networks

We study the capacity allocation problem in service overlay networks (SON)s with state-dependent connection routing based on revenue maximization. We formulate the dimensioning problem as one in profit maximization and propose a novel model with several new features. In particular the proposed methodology employs an efficient approximation for state dependent routing that reduces the cardinality of the problem. Moreover, the new formulation also takes into account the concept of network shadow prices in the capacity allocation process to improve the efficacy of the solution scheme.