The authors study how to expand capacity of the local access network to meet projected demand over a given planning horizon at minimum cost. The alternatives for capacity expansion include both copper cable and digital multiplexer. They show how the problem can be modeled as an integer programming problem; however, the size of the problem for a typical network and the discontinuous cost structure of the expansion facilities preclude the use of a general purpose integer programming code to solve it. A decomposition approach that takes advantage of the structure of the problem and allows the problem to be solved in a reasonable amount of time is proposed. The solution methods described have been implemented and computational results are discussed. The algorithm forms a part of the network planning system NETCAP that has been in use since 1989.
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