Packet-switched xHaul networks based on Ethernet technology are considered a promising solution for assuring convergent, cost-effective transport of diverse radio data traffic flows in dense 5G radio access networks (RANs). A challenging optimization problem in such networks is the placement of distributed processing units (DUs), which realize a subset of virtualized baseband processing functions on general-purpose processors at selected processing pool (PP) facilities. The DU placement involves the problem of routing of related fronthaul and midhaul data flows between network nodes. In this work, we focus on developing optimization methods for joint placement of DUs and routing of flows with the goal to minimize the overall cost of PPs activation and processing in the network, which we refer to as the PPC-DUP-FR problem. We account for limited processing and transmission resources as well as for stringent latency requirements of data flows in 5G RAN. The latency constraint makes the problem particularly difficult in a packet-switched xHaul network since it involves the non-linear and dynamic estimation of the latencies caused by buffering of packets in the switches. The latency model that we apply in this work is based on worst-case calculations with improved latency estimations that skip from processing the co-routed, but non-affecting flows. We use a mixed-integer programming (MIP) approach to formulate and solve the PPC-DUP-FR optimization problem. Moreover, we develop a heuristic method that provides optimized solutions to larger PPC-DUP-FR problem instances, which are too complex for the MIP method. Numerical experiments performed in different network scenarios indicate on the effectiveness of the heuristic in solving the PPC-DUP-FR problem. In particular, the heuristic achieves up to 63% better results than MIP (at the MIP optimality gap equal to 76%) in a medium-size mesh network, in which the MIP problem is unsolvable for higher traffic demands within reasonable runtime limits. In larger networks, MIP is able to provide some results only for the PPC-DUP-FR problem instances with very low traffic demands, whereas the solutions generated by the heuristic are at least 83% better than the ones achieved with MIP. Also, the analysis performed shows a significant impact of the PP cost factors considered and of the level of cost differentiation of PP nodes on the overall PP cost in the network. Finally, simulation results of a case-study packet xHaul network confirm the correctness of the latency model used.
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