Budget-Constrained, Capacitated Hub Location to Maximize Expected Demand Coverage in Fixed-Wireless Telecommunication Networks

Authors:
Ramesh Bollapragada;Yanjun Li;Uday S. Rao
Affiliations:
College of Business, San Francisco State University, 1600 Holloway Avenue, San Francisco, California 94132, USA, and Bell Laboratories, Lucent Technologies, Holmdel, New Jersey 07733, USA;Krannert School of Management, Purdue University, West Lafayette, Indiana 47907, USA;College of Business, University of Cincinnati, P.O. Box 210130, Cincinnati, Ohio 45221, USA
Venue:
INFORMS Journal on Computing
Year:
2006

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Abstract

This paper presents a quantitative model for telecommunication network installation by companies in the broadband-access business, specialized to the fixed-wireless case. Under stochastic demand modeled using scenarios, we maximize the expected demand coverage subject to a budget constraint on hub installation, and technological constraints on demand coverage by installed hubs. There are multiple hub types, differing in costs and capacities. We present a practical greedy heuristic based on the budgeted maximum-coverage problem and analyze its worst-case performance. For special cases with a single hub type or a single demand scenario, we show that a guarantee of 1 - 1/e or 63.2% applies to our greedy heuristic. For the general case we develop a data-dependent performance guarantee. Through computational experiments, we show that the greedy heuristic's empirical performance is, on average, within 2% of the optimal expected demand coverage.