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Consider the following design problem concerning implementation of virtual- circut service. If virtual circuits are used internal to the subnet, each data packet must have a 3-byte header and each router must tie up 8 bytes of storage for circuit identification. If datagrams are used internally, 15 byte headers are needed but no router table space is required. Transmission capability costs 1 cent per $10^6$ bytes, per hop. Very fast router memory can be  purchased for 1 cent per byte and is depreciated over two years, assuming a 40 hour business week. The statistically average runs for 1000 sec. in which time 200 packets are transmitted. The mean packet requires four hops. Which implementation is cheaper and why?
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+1 vote
mean packet requires 4 hops means 3 router in between the source and destination.

header size =3 bytes for each packet so overhead for 200 packets=200*3=600 bytes

routers have 8 bytes for circuit identification means total=8*3=24 bytes

let the data size=D,so packet size=(D+3) bytes

transmission cost =1 cent per 10^6 bytes per hop=>transmission cost for 1 Byte,per hop=10^-6 cent

transmission cost for 1 packet=(D+3)*number of hops*transmission cost of 1 hop

=>(D+3)*4*10^-6 cents

so total costs=200*(D+3)*4*10^-6 cents=>8*(D+3)*10^-4 cents

in the second case header size is 15 bytes for each packet so total header overhead=200*15=3000 bytes

no router table space is required means space=0 byte