Approximation algorithms for a capacitated network design problem

We study a capacitated network design problem with applications in local access network design. Given a network, the problem is to route flow from several sources to a sink and to install capacity on the edges to support the flow at minimum cost. Capacity can be purchased only in multiples of a fixed quantity. All the flow from a source must be routed in a single path to the sink. This NP-hard problem generalizes the Steiner tree problem and also more effectively models the applications traditionally formulated as capacitated tree problems. We present an approximation algorithm with performance ratio (ρ_ST + 2) where ρ_ST is the performance ratio of any approximation algorithm for the minimum Steiner tree problem. When all sources have unit demand, the ratio improves to ρ_ST + 1) and, in particular, to 2 when all nodes in the graph are sources.