Optimal allocation of protective resources in shortest-path networks

This article introduces a game-theoretic approach for allocating protection resources among the components of a network so as to maximize its robustness to external disruptions. Specifically, we consider shortestpath networks where disruptions may result in traffic flow delays through the affected components or even in the complete loss of some elements. A multilevel program is proposed to identify the set of components to harden so as to minimize the length of the shortest path between a supply node and a demand node after a worst-case disruption of some unprotected components. An implicit enumeration algorithm is then developed to solve the multilevel problem to optimality. The approach is streamlined by solving the lower-level interdiction problem heuristically at each node of an enumeration tree and by using some variable fixing rules to reduce the dimension of the lower-level problems. A thorough computational investigation demonstrates that the proposed solution method is able to identify optimal protection strategies for networks of significant size. The paper is concluded with a study of the sensitivity of the solution approach to variations of the problem parameters such as the level of disruption and protective resources and the distribution of the arc lengths and delays.