Multi‐service multi‐facility network design under uncertainty

The problem of designing high speed networks using different modules of link capacities, in the same model, in order to meet uncertain demands obtained from different probability distribution functions (PDF) is a very hard and challenging real network design problem. The novelty of the new model, compared to previous ones, is to allow installing more than one module per link having equal or different capacities. Moreover, the scenarios of traffic can be generated, according to practical observations, from the main classes of uncertain demands (multi‐service) simulated from different PDFs, including heavy tailed ones. These classes of traffic are considered simultaneously for the scenario generation, different from related works in the literature that use only one probability distribution function to simulate the scenarios of traffic. In this work we present the problem formulation and report computational results using branch‐and‐bound and L‐shaped decomposition solution approaches. We consider in the same model up to three different types of modular capacities (multi‐facility), since it seems that using more than this can lead to an intractable model. The objective is to minimize penalty (in case of unmet demands) and investment costs. We obtain confidence intervals (with 95% of covering rate) on the expected optimal solution value for the resulting two‐stage stochastic integer‐modular problem and discuss when they are meaningful. Numerical experiments show that our model can handle up to medium real size instances.