Stage-wise decision making for the capacity planning and control of telecommunications switching systems

Since “price-cap” regulation went into effect in 1995 it became important in the telecommunications industry to reduce inventories and/or excessive capacity in the Public Switched Telecommunications Network (PSTN). The problem of telephone subscriber disconnect and subsequent reconnection began to receive a significant amount of managerial attention. In this thesis, a stage-wise procedure is developed to deal with the disconnect and subsequent reconnect problem, integrated with the capacity planning of a switch, and considering implementation issues related to the problem solution. The stage-wise procedure recognizes that decision systems evolve gradually over time, and that the greater the magnitude of change an analyst attempts to impose on an existing process the more likely it is that the proposal will be met with resistance. The stage-wise procedure starts with the description of the original problem and existing methods, based on non scientific rules, which define when to place an order for adding capacity to an existing switch. In this case, a single utilization rate is used for all switches in lieu of a capacity planing process that recognizes the differences between switches. The stage two solution improves the manner in which the number of lines reserved for the disconnect/reconnect process is calculated when planning the next growth job to the switch by considering the observed reconnect function. Explicit consideration of inventory holding costs and labor costs associated with the disassembly of telephone circuits are brought into the decision system in the stage two solution, as well. In the stage three solution, time dependency of the disconnect process and the reconnect function are considered. The problem is expanded at this stage to address the capacity planning process and order placement costs. Empirical data of monthly installs, monthly disconnects and their reconnect function from 13 telecommunications provider switches over a five-year study period is used to evaluate the cost performance of the three solutions. The stage two solution reduces cost by approximately 5.0% over the stage one solution. The stage three solution reduces cost by approximately 2.8% over the stage two solution. Finally, the assumption of a stationary process is revisited in stage four of the procedure in order to model a coordinated three parameter solution to the problem, and an example is presented. In this approach, the three decision variables; t′, the length of time to leave a non revenue producing circuit connected, R, the inventory level at which to issue a capacity expansion order, and Q, how much capacity to order, are solved simultaneously.