We consider a loss system model of interest in telecommunications. The
re is a single service facility with N servers and no waiting room. Th
ere are K types of customers, with type i customers requiring Ai serve
rs simultaneously. Arrival processes are Poisson and service times are
exponential. An arriving type i customer is accepted only if there ar
e R-i (greater than or equal to A(i)) idle servers. We examine the asy
mptotic behavior of the above system in the regime known as critical l
oading where both N and the offered load are large and almost equal. W
e also assume that R-1, ..., RK-1 remain bounded, while R-K(N) --> inf
inity and R-K(N)/root N --> 0 as N --> infinity. Our main result is th
at the K dimensional ''queue length'' process converges, under the app
ropriate normalization, to a particular K dimensional diffusion. We sh
ow that a related system with preemption has the same limit process. F
or the associated optimization problem where accepted customers pay, w
e show that our trunk reservation policy is asymptotically optimal whe
n the parameters satisfy a certain relation.