The economics of Santa Claus’s Christmas operation is perhaps the most ambitious logistics problem ever conceived. Each December, a vast global enterprise mobilises to deliver gifts to hundreds of millions of children, perfectly timed for the night of the 24th and the morning of the 25th. Behind the folklore lies an implicit economic system of remarkable efficiency, balancing production, inventory, transport, and distribution in a single night. If one treats Santa’s workshop not as magic but as a model economy, it becomes a fascinating exercise in applied economics—an improbable, but internally consistent, operation that obeys the logic of scale, incentives, and coordination.
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