Relief period optimization under budget constraints

Increased competition and the rapidly changing telecommunications environment have made it necessary to invest in new technologies and services. Additionally, there are pressures not to borrow heavily for these investments. When cash is tight and budgets must be constrained, the costs of placing capacity to cover forecast growth in the most economical manner may exceed the available capital budget. This paper investigates optimal capacity placement under a given budget, and presents a solution method to find optimal technology selection and project sizing. The problem is formulated as a nonlinear integer programming problem, typically with many hundreds of integer variables and many hundreds of continuous variables. A solution method is developed that exploits the structure of the problem, and reduces it to a two-dimensional implicit search over two multipliers: one that governs technology selection and one that governs project sizing.