The Evolution of Real Newsboy Contracts in the US

Perhaps the two most wildly recognized building blocks of inventory theory are the EOQ and the quot;newsboyquot; or quot;newsvendorquot; models. Moreover, almost the entire supply chain contract literature was built around the latter. The idea behind this paper is the following: before we can even attempt to generalize insights from the model to other situations, we must understand its limitations when applied to the very apparent reason for its existence: actual newsboys. However, a study of present newsboys contracts is almost futile without a deep understanding of the chain of events that lead to its present form. This paper attempts to respond the following questions: When and how have newsboy contracts evolved in the US through the years? Did circumstances change in a way that impacted the types of contracts out there? Why is it that today, of all possible contracts, the wholesale price full returns contract prevails?