We consider the design and capacity expansion of ATM networks as an optimiz
ation problem in which flows representing end-to-end variable bit-rate serv
ices of different classes are to be multiplexed and routed over ATM trunks
and switches so as to minimize the costs of additional switches and transpo
rt pipes while meeting service quality and survivability constraints. After
an overview of the underlying fractional Brownian motion model for aggrega
te flows, a nonlinear multicommodity optimization problem is formulated and
LP-based heuristics for its approximate solutions are described. Finally,
computational results are produced that demonstrate realistic size problems
can be solved with the proposed method to shed light on key economic chara
cteristics of ATM traffic, such as safe levels of statistical multiplexing,
as well as robust and efficient design alternatives.