The governing requirements in forecasting the weather for industrial operations are profitability and safety. Accuracy, though desirable, is not sufficient to guarantee utility. In order to be useful, the forecasts must be worded so that they can easily be converted into profitable business decisions. Thus, the industrial meteorologist needs not only a knowledge of the weather but also a considerable economic insight into the industrial activities and problems of his client. Special attention has to be paid to the effect of each forecast on the profitability and safety of the client's operations. In certain instances, the meteorologist may even need to recommend some routinely instituted protective action as being more profitable than actions based on his own forecasts.
Approximate methods, with which the forecaster can estimate the most profitable action available to his client for a particular industrial operation, are given, and several illustrative examples are discussed. The methods are first applied to an elementary forecast situation in which the occurrence or nonoccurrence of a weather event is forecast, and then the procedures are generalized to the more elaborate multivalued forecast situations, usually encountered in industrial operations.
1 Former affiliation: Shell Development Company, Houston, Texas.
2 This material is a revised version of publication No. 197, Shell Development Company, Exploration and Research Division, Houston, Texas, which was presented by the author at the 175th National meeting of the American Meteorological Society in Chicago, Illinois on 26 March 1959.