Thesis (MSc (Mathematical Sciences. Computer Science))--University of Stellenbosch, 2008. / Consider a path-oriented telecommunications network where calls arrive to each route in a Poisson process. Each call brings on average a fixed number of packets that are offered to route. The packet inter-arrival times and the packet lengths are exponentially distributed. Each route can queue a finite number of packets while one packet is being transmitted. Each accepted packet/call generates an amount of revenue for the route manager. At specified time instants a route manager can acquire additional capacity (“interface capacity”) in order to carry more calls and/or the manager can acquire additional buffer space in order to carry more packets, in which cases the manager earns more revenue; alternatively a route manager can earn additional revenue by selling surplus interface capacity and/or by selling surplus buffer space to other route managers that (possibly temporarily) value it more highly. We present a method for efficiently computing the buying and the selling prices of buffer space. Moreover, we propose a bandwidth reallocation scheme capable of improving the network overall rate of earning revenue at both the call level and the packet level. Our reallocation scheme combines the Erlang price [4] and our proposed buffer space price (M/M/1/K prices) to reallocate interface capacity and buffer space among routes. The proposed scheme uses local rules and decides whether or not to adjust the interface capacity and/or the buffer space. Simulation results show that the reallocation scheme achieves good performance when applied to a fictitious network of 30-nodes and 46-links based on the geography of Europe.