Optimal Allocation of Leased Communication Lines

Many large companies and governmental agencies transmit a large quantity of long distance communications between facilities. Most of these organizations reduce the expense of transmitting these communications by leasing private telephone lines instead of using commercial long distance. The monthly expense of leasing telephone lines between two facilities depends upon the number of lines leased and the air miles between facilities; it is independent of usage. For this analysis, the number of lines leased between two facilities is called a link, and the aggregate of all the links leased by an organization is called a network. This paper presents a technique to determine the optimal number of lines to be leased on each link, subject to a limit on the network expense. The technique was developed for Lockheed Missiles & Space Company at Sunnyvale, California, and its implementation has provided management with a more efficient means of controlling the leased line network.