**3. Planning approaches for demand uncertainty**

In order to provide cost‐efficient network solutions, it is necessary to plan optical networks over a long‐time horizon. When dealing with optical networks, where the cost to build the network is high and the investment that takes place should last for a long time, sophisticated planning decisions must take place to ensure that the network infrastructure will not require any major upgrades over a predetermined amount of time. The problem becomes more involved in the case of future traffic demand forecasts that include uncertainty, as network planning decisions must be taken without the exact knowledge of future traffic demands. In this case, these decisions will be based on estimations. In the remaining of this chapter, the proposed multi‐period network planning approaches with uncertain traffic demands are discussed. The planning approaches assume that for the first period, the demands follow a known distribution and for the periods that follow the demands are increased based on a multiplicative factor.

The multi‐period network planning problem in this chapter will be investigated for two dif‐ ferent period‐planning types as detailed below.

#### **3.1. Incremental network planning**

This approach considers the demands of the next period and optimizes the investment cost in each period. Therefore, the solution is calculated sequentially for each period. The solu‐ tion can be optimal for each period but not jointly for all the periods under consideration. Once the solution is provided for one period, then this solution affects the solution of the periods that follow. This is due to the fact that the solution of one period is assumed to be fixed and the solutions of the periods that follow are now based upon the previously found solutions.

#### **3.2. Multi‐period network planning**

This approach considers the demands of all periods and optimizes the investment cost from the beginning of the planning period, that is the multi‐period approach minimizes the net‐ work cost over all periods at once. Therefore, the demand distribution for every time period is necessary. This approach can calculate an optimal overall solution and provide decisions for the investment strategy of network operators.
