Turkey Paper and Paper Products Sector Import Forecasting with Artificial Neural Networks

Abstract

The paper and paper products sector is a crucial component of the Turkish economy, characterized by significant interactions with various other sectors. Türkiye imports substantial amounts of paper, playing a vital role in the growth and sustainability of this sector. Accurate import forecasting is essential for strategic planning and resource management. This study aims to forecast the imports of the Turkish paper sector for the period from April 2023 to March 2024 using two artificial neural network (ANN) models: Multilayer Perceptron (MLP) and Radial Basis Function (RBF). The dataset, obtained from the Turkish Statistical Institute (TurkStat), covers 219 months of data from 2005 to 2023. The dependent variable is Türkiye’s monthly import value of paper and paper products, while the independent variables include the monthly average US Dollar exchange rate, monthly imports of Türkiye, the Manufacturing Industry Production Index, the Paper Production Index, and the monthly exports of paper and paper products from Türkiye. The MLP model forecasts that the monthly imports of paper and paper products will range between 270 to 300 million USD, while the RBF model predicts values between 268 and 321 million USD. These findings underscore the efficacy of ANNs in providing accurate and reliable forecasts. This study addresses a gap in the literature by applying ANN methods to forecast imports in the paper and paper products sector, presenting a novel approach that can assist companies in making better-informed decisions regarding inventory management, production planning, and marketing strategies. By leveraging the advanced computational power and pattern recognition capabilities of ANNs, the study aims to enhance the strategic planning processes in the paper and paper products industry. The traditional methods often used in trade data analysis and forecasting are limited in capturing the complex and non-linear relationships present in economic data. This study's application of ANNs offers a significant advancement by utilizing models that can better handle such complexities. The accuracy of the MLP and RBF models highlights their potential as valuable tools for economic forecasting, providing insights that are crucial for optimizing supply chain operations and improving market responsiveness. The results indicate that companies can achieve better operational performance and increased customer satisfaction by effectively forecasting future import requirements. The originality of this study lies in its methodological approach, utilizing ANN models to forecast import values in a sector where traditional methods have been predominant. This innovative approach not only contributes to the existing body of knowledge but also offers practical applications for businesses within the sector. The detailed analysis of the data, combined with the robust modeling techniques employed, provides a comprehensive framework for understanding the dynamics of paper imports and making strategic decisions based on accurate predictions. In conclusion, the study demonstrates the significant success of artificial neural networks in predicting import values for the Turkish paper and paper products sector. The findings provide valuable information that can aid companies in strategic planning, enhancing their ability to manage inventory, plan production, and develop effective market strategies. The research contributes to the literature by filling a gap with its innovative approach, offering new perspectives and practical applications for improving decision-making processes in the industry.