Burak Kazaz is the Steven Becker Professor of Supply Chain Management at the Whitman School of Management and the Laura J. and L. Douglas Meredith Professor for Teaching Excellence at Syracuse University. Dr. Kazaz is the Director of the Brethen Institute. He served as the Whitman Teaching Fellow from 2010 to 2012, as the Whitman Research Fellow from 2016 to 2018 and as the Executive Director of the H.H. Franklin Center for Supply Chain Management between 2013 and 2017.
Dr. Kazaz’s research interests include risk mitigation, supply chain finance, and socially-responsible supply chains. His publications helped many agricultural and retail firms in their global operations. He established the field of “wine analytics,” and his work on the pricing of wine futures has been influential in the wine industry benefiting winemakers and distributors. His publications can be found in premier journals such as Manufacturing & Service Operations Management, Management Science, Operations Research, and Production and Operations Management. His impact is evidenced in that he is frequently featured in popular media including The Wall Street Journal, Wine Advocate, Wine Spectator, RobertParker.com, Forbes, Bloomberg, Financial Times and the fine wine stock market Liv-ex. He enjoys collaborating with industry; his work is recognized by IBM, British Petroleum, and Procter & Gamble, and is supported through grants from Staples, IBM, and APICS.
Dr. Kazaz’s papers have been the recipient of numerous awards: The 2017 Wickham Skinner Prize from the Production and Operations Management Society, the 2016 Best Paper Award from the College of Humanitarian Operations and Crises Management of the Production and Operations Management Society, the 2015 INFORMS President’s Pick as the best paper among all INFORMS journal publications, and the 2014 Best Analytical Paper Award from the Decision Sciences Institute. Two of his publications were selected for the 2017 INFORMS Editors’ Cut, another paper was a runner-up for the 2018 iFORM Best Paper Award.
Dr. Kazaz presently serves as the Vice President of Manufacturing & Service Operations Management (MSOM) Society. He also chaired iFORM (integration of finance, operations and risk management) special interest group under INFORMS from 2018 to 2020. He served as an associate editor for Manufacturing & Service Operations Management, and is a senior editor for Production and Operations Management and an area editor for IISE Transactions.
Dr. Kazaz’s teaching has been recognized with numerous awards. In 2012, he is named as the Meredith Professor for Teaching Excellence, the highest honor given at Syracuse University. He is the recipient of the first-ever Whitman School of Management Teaching Innovation Award in 2011.
Dr. Kazaz received his Bachelor’s and Master’s degrees in Industrial Engineering from Middle East Technical University in Turkey and his Ph.D. from the Krannert Graduate School of Management at Purdue University. Prior to this appointment, he was a faculty member at the University of Miami and at Loyola University of Chicago, taught at the Executive Education programs of the University of Chicago. He was a visiting professor at Cornell University and the University of California Berkeley. Dr. Kazaz recently developed a unique course on the topic of designing supply chains for growth; the course uses design thinking principles and is popular among start-ups and small firms. His recent studies combine his risk mitigation and pricing analytics with the Blockchain technology.
Prior to his academic career, Dr. Kazaz worked at IBM. Additional information about Dr. Kazaz can be obtained at his personal site https://bkazaz.expressions.syr.edu.
Among agricultural goods, wine is a specialty product. Fine wine grapes require exceptional care and attention. After the harvest, grapes are crushed and the wine goes through a long aging process. In the case of Bordeaux-style wines, for example, the aging process in barrels can last 18 to 24 months. The aging continues for another 20 to 30 years in the bottle. This long aging process makes wine production a risky venture. Consumers follow the evolution of these fine wines closely, track their corresponding tasting reviews and scores, and are often informed about climatic conditions during the growing seasons. Thus, wine is one of the most heavily tracked and publicized agricultural products. Considering the long production time, winemakers can mitigate their operational and financial risks by selling their wines in advance in the form of wine futures.
In this tutorial, we describe predictive and prescriptive analytical methods that assist primary enterprises that produce and distribute wine in their decision-making processes. The tutorial begins with predictive models that estimate the true value of wine futures prices. These estimation models are essential to the financial exchange known as the London International Vintners Exchange (Liv-ex) where wine futures contracts are traded. Coined as “realistic prices” by Liv-ex, these predictive models assist buyers in their purchasing decisions as they can determine whether a futures contract is underpriced or overpriced. The tutorial then develops risk mitigation models to assist winemakers in mitigating uncertainty in weather conditions and tasting expert reviews. These prescriptive models rely on predictive analytics which help determine consumers’ utilities from buying the wine in advance, or later, or not purchasing it at all. Prescriptive models such as a multinomial logit model focus on determining how much of the wine should be sold in advance in order to reduce risk exposure and maximize the expected profits of the winemaker. On the buyer side, the tutorial introduces stochastic portfolio optimization models for both wine distributors and importers in their decision regarding how to allocate limited budgets between wine futures contracts and bottled wine. These prescriptive models are, once again, built on predictive analytics that estimate the evolution of futures and bottle prices over time under fluctuating market and weather conditions.
Wine is an exemplary agricultural product; its production and quality perceptions are widely tracked by businesses and consumer. The predictive and prescriptive models of this tutorial help create transparency in this largely opaque market. They assist the industry in its drive towards market efficiency. The tutorial also offers future research directions in wine analytics and describes how these techniques can be beneficial for the production and distribution of other agricultural products.