Network Design

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Budget Design Problem

The budget design problem inverts the minimum cost problem by taking an exogenous upper bound on investment costs into consideration. As an example we refer to a government which designates a fixed amount of tax income to road infrastructure investments. The instructed network designer is then asked to assign these resources to network improvements in the "most desirable" way.

Discrete Network Design

Discrete network design problems are concerned with the topology of the network. The basic ingredients are a set of potential nodes and a set of potential edges. Typical tasks are explained best by giving some examples.

see also continuous design

Continuous Network Design

Continuous network design problems have the task of improving the functionality of networks or of network elements so that the level of service (comfort, risk, travel time, etc.) delivered to the customers increases. These problems take the network topology as given. They are concerned with the parameterization of a network (link or node capacity, user charges, etc.).

see also discrete design

Minimum Investment Cost

Traffic Diversion and Traffic Dimininution (or Creation)

Any measure that improves traffic conditions causes two modifications of the prevailing traffic pattern, in particular, when the demand for traffic is price sensitive. On the one hand, traffic diversion is concerned with rerouting a fixed volume of traffic. On the other hand, traffic diminution (or creation) takes into account that tolls reduce the demand for traffic but it essentially ignores the traffic assignment problem.

Recall the example of the City of London. The congestion charge has reduced traffic volumes by 20% within the eight-square-mile downtown zone (traffic diminution). The remaining traffic now can be reorganized under less restrictive traffic conditions (traffic diversion).

Literature: Beckmann, McGuire (1953)

Hub-and-Spoke Networks

Airline passenger carriers and parcel delivery networks take care of routing by developing so-called hub-and-spoke networks. At first, all flows are collected via spokes at specialized nodes, say hubs. In doing so the bundling of flows on the interhub links makes more efficient transportation technologies available to the carrier. At least to some extend, hub-and-spoke networks have the disadvantage that when considerable traffic volumes are concentrated on a few links, failures of network components may cause severe losses. Literature: O'Kelly (1986) or Bryan, O'Kelly (1999)