This paper studies a dynamic buffer management problem with one buffer inserted between two interacting components. The component to be controlled is assumed to have multiple power modes corresponding to different data processing rates. The overall system is modeled as a hybrid system and the buffer management problem is formulated as an optimal control problem. Different from many previous studies, the objective function of the proposed problem depends on the switching cost and the size of the continuous state space, making its solution much more challenging. By exploiting some particular features of the problem, the best mode sequence and the optimal switching instants are characterized analytically using a variational approach. Simulation results based on real data shows that the proposed method can significantly reduce the energy consumption compared with another heuristic scheme in several typical situations. (c) 2008 Elsevier Ltd. All rights reserved.