Demand drivers analysis and forecasting for production planning

Abstract

The purpose of this study is to examine macroeconomic indicators and their ability to explain demand relationships for Stora Enso as well as forecasting future values. Indicators examined were Wholesale Trade, Industrial Production, Harmonized Index of Consumer Prices (HICP), and Retail Trade. We studied if commonly used macroeconomic indicators can be utilized to determine a linear relationship. The hypothesis is that there exists a linear relationship with some of the indicators. The data is collected from the European Commission’s database from the years 2010-2023. Empirical studies show that macroeconomic indicators have been able to explain Stora Enso’s production and Wholesale Trade is statistically significant. Vector Auto Regression (VAR) and Impulse response plots were utilized to study the short-term impact on Y₁ (target variable) and the results show that HICP and industrial production have the most volatile impact on Y₁. Future forecasts of both VAR and ARIMA show stagnating production in the short-medium term.