Traffic management provides optimal utilization of network resources by managing network traffic and providing service guarantees to user connections. It includes functions such as traffic contract management, traffic shaping, traffic policing, priority control, flow control, and congestion control. Connection admission control is used to determine whether new connection requests can be accepted while ensuring sufficient resources and quality of service for existing connections. Traffic shaping techniques such as leaky bucket algorithm alter traffic characteristics to make them more predictable and conforming to network requirements.