--My base case example

DECLARE @zone_peril VARCHAR(MAX)
DECLARE @input_table VARCHAR(MAX)
DECLARE @SQL nvarchar(MAX)

    SET @input_table = '2018_1_PROJECTED_INPUT_AUAP'


    SET @SQL = 'set @zone_peril =  right(''' + @input_table + ''', 4)'
    SELECT @SQL
    -- Returns set @zone_peril = select right('2018_1_PROJECTED_INPUT_AUAP', 4) which is correct

    SET @zone_peril =  RIGHT(@input_table, 4)
    SELECT @zone_peril
    --Returns AUAP which is correct

    EXEC(@SQL)
    --Must declare the scalar variable "@zone_peril"
    --@zone_peril is being reset after using set @sql? here is where I'm stuck


/* Ultimately all i'm trying to do is generate an output table name based on the name of an input table as follows: */

ALTER PROCEDURE XYZ

@cedant VARCHAR(MAX),
@input_table VARCHAR(MAX)

AS
BEGIN
    DECLARE @SQL VARCHAR(MAX)
    DECLARE @output_table VARCHAR(MAX)
    DECLARE @zone_peril VARCHAR(MAX)

        SET NOCOUNT ON

    SET @SQL = 'set @zone_peril =  right(''' + @input_table + ''', 4)
                set @output_table = ''2018_1_OUTPUT_'''+@cedant+'''_'''+@zone_peril+''''

        EXEC(@SQL)

        SELECT @SQL =   'Create table'+@output_table+'(column definitions etc...)'
        /*SCRIPT WHICH RUNS DATA INTO @output_table OK */
        END

/*When I run the SP I don't get any error message but I don't get any output table either. I think its to do with the table names.
In your post you mention dynamically assigning a value to @zone_peril is not a good idea, so I'm curious if you have other suggestions.
Ultimately my goal is to be able to pass a list of input table names into the script and have it generate output tables */