This study developed an objective drought assessment tool through a Drought Index (DI), and then developed a drought forecasting tool using the developed DI to forecast future
drought conditions. These tools can be used to assist water managers to assess droughts effectively and forecast future drought conditions, which will allow them to plan ahead
the water management activities during droughts. The Yarra River catchment in Australia was considered as the case study catchment, since the management of water resources in this catchment has great importance to majority of Victorians.

To achieve the objectives of this study, an evaluation of existing DIs was first conducted in terms of their suitability for the assessment of drought conditions in the
study catchment. Based on the findings of the evaluation study, a new Nonlinear Aggregated Drought Index (NADI) was developed and evaluated for the Yarra River catchment.