consists of two parts: those discs in the possession of customers, and those instock waiting for a request. Netflix had two options for processing a customer’srequest for a new disc once his disc is returned to the warehouse: (1) send thenext disc in the customer’s queue from the stockpiled inventory of discs, or(2) process the returned discs quickly and satisfy the customer’s request for thenext disc in his queue from those being returned that day. Each warehouse canhandle 60,000 orders per day, so a good number of requests could be satisfiedwith in-transit returns. Netflix opted for the second option, thereby reducingthe need for a larger stockpile of discs. The process at a typical warehouse is asfollows: