Control of input and demand rates in inventory systems of perishable commodities

In this article we explore some problems of control of arrival and demand rates in systems of perishable items. First, a model in which the demand rate can be switched from one level to another is considered, and a corresponding optimization formulation for the control policy is developed. The model is then extended, with some variants, to one with two switchover levels. A duality equivalence between this observable Markov process based on the virtual waiting time and the equivalent nonobservable Markov process is explored and applied.