Measuring and Managing Weather Variability : Protecting Businesses from Weather Risks

This paper is based on several lines of research, including:- Finding the most relevant weather variables to explain changes in sales, operating costs, or profits using daily weather observations;- Providing a weather-sensitivity ranking by sector and weather variable;- Modelling the relationship between weather variables and sales;- Determining the average and maximum historical losses caused by unfavorable weather conditions;- Calculating the potential maximum loss, this new equation defined by the researchers as WeatherRisk