Multi-layer MPLS network design: The impact of statistical multiplexing

The possibility of adding MPLS support to transport networks is considered an important opportunity by telecom carriers that want to add packet services and applications to their networks. However, the question arises whether it is suitable to have MPLS nodes just at the edge of the network to collect packet traffic from users, or to introduce also MPLS facilities on a subset of the core nodes in order to exploit packet switching flexibility and multiplexing, thus inducing a better bandwidth allocation. In this paper we propose a mathematical programming model for the design of two-layer networks where MPLS is considered on top of transport networks (SDH or WDM depending on required link speed). Our models take into account the tradeoff between the cost of adding MPLS support in the core nodes and the savings in the link bandwidth allocation due to the statistical multiplexing and the traffic grooming effects induced by MPLS nodes. The traffic matrix specifies for each point-to-point request a pair of values: a mean traffic value and an additional one. Using this traffic model, the effect of statistical multiplexing on a link allows to allocate a capacity equal to the sum of all the mean values of the traffic demands routed on the link and only the highest additional one. We propose a path-based Mixed Integer Programming (MIP) model for the problem of optimizing the number and location of MPLS nodes in the network and the link capacities. We apply Lagrangian relaxation to this model and use the subgradient method to obtain a lower bound of the network cost. As the number of path variables used to model the routing grows exponentially with the graph size, we use an initially limited number of variables and a column generation approach. We also introduce a heuristic approach to get a good feasible solution. Computational results are reported for small size and real-world instances.