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Data Analysis, Predicting the Weather, and Business Decisions

ThunderstormMany people believe that weather impacts us only when it is severe. However, weather impacts people and businesses in a myriad of other ways.

Some of the ways that weather impacts business are obvious. For example, food prices go up after a rash of bad hail, drought, or extreme heat.

Some of those impacts are less obvious. Retail sales can plummet when the weather is bad because nobody wants to be out in the middle of a storm.

The science of weather prediction itself is getting better. National Geographic outlined NOAA’s improved hurricane forecasting software quite recently.

Business is finding ways to turn improved weather data to its advantage. This CNBC report titled “Big Data Companies Try to Outwit Mother Nature’s Chaos” outlines some of those methods.

“While it’s still virtually impossible to predict an event like [the Oklahoma tornado,] the models and forecasts from big data companies can be extremely valuable to a variety of businesses, ranging from retailers to insurers, as they plan ahead.

Earth Risk, for example, focuses on the energy trading market. By focusing in on probability models for extreme heat and extreme cold it can help investors profit in the futures market.

[John Plavan, co-founder and CEO of Earth Risk Technologies] points to the winter of 2011-12, which many traders in the natural gas market expected to be cold, driving up futures prices. Earth Risk’s models, though, showed that the atmosphere wasn’t setting itself up for a high probability of cold weather, letting clients position themselves to make money when natural gas prices declined.”

Some private weather prediction models may even have an edge on NOAA. For example, IBM’s “Deep Thunder” draws its data from multiple sources, including NOAA itself. It also uses Earth Networks, NASA, and the U.S. Geological Survey.

If weather has an impact on your business it is a good idea to learn more about data mining and its many uses. TMA offers a variety of data analytics training courses to help companies learn how to use these powerful tools. Get started with TMAs’ free webinar today.

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