The current generation optical networks are evolving as transparent networks by implementing all optical components like OXCs, OADMs, etc., and hence, minimizing the network operational cost. The routing and wavelength assignment is the major issue of concern while planning these networks with the thrust on maximum resource utilization, minimum operational and capital expenses. The various factors like reduced O-E conversions taking place, dynamic routing, network state dependence and additive nature of impairments make the system more vulnerable to risk of high levels of accumulated impairments, thereby decreasing the quality of transmission (QoT). In some cases, QoT is so low that it becomes difficult to retrieve the signal at receiving end. Considering the huge data traffic being carried by the network, it becomes crucial to inculcate the impact of physical layer impairments (PLIs) in path selection and routing applications. In order to address the issue, impact of different PLIs on quality of signal is presented in the form of BER and Q-factor. The impact is then considered for routing applications with focus on range, intelligibility and scalability of the system. The network performance in terms of blocking rate is calculated. The regenerator placement is suggested as one of the methodologies of improvement in network performance. Further, network behavior is studied by making 0%, 50%, and 100% nodes regeneration capable.