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Network design problem has originated in the practice of traffic engineering. Planning and designing road system has always been the most important task of traffic engineers. The objective of network design problem is to plan and design an improvement project for a road network systematically so that the total travel cost of the whole road system is minimized. Because of the complexity of the models, which are expressed as non-convex and bi-level programming, satisfactory solutions of network design problem are rather difficult to obtain by the traditional non-linear optimization algorithms. The paper has studied the models of network design problem and has designed a genetic algorithm. With a test road network as an example, it has shown the application of the new genetic algorithm to network design problem. Impacts of a model parameter upon solutions are then carefully analyzed and some meaningful conclusions and suggestions have been drawn.