A system dynamics model to assess the commercial viability of hydroponics product service system

Abstract

Hydroponics, a soilless farming technique, is emerging as a sustainable alternative to traditional agriculture. However, large scale adoption of hydroponics is hampered by higher capital and production costs and inadequate technical expertise at the farm level. As a result, the manufacturers and entrepreneurs involved in hydroponics systems are exploring different business models to enhance commercial viability and adoption. Since these business models include a combination of products and services, they are better viewed as Product-Service systems (PSS). The objective of this study is to develop a System Dynamics (SD) model of a result-oriented hydroponics PSS to guide decisions on plant, energy, and nutrients to manage yield and production costs. The study uses the SD method to model the relationships between technical factors such as nutrient delivery, water quality, light, humidity, temperature, and PSS factors such as location choices, product and service quality. The model results reveal that light and humidity have a higher impact on crop yield when compared to factors such as flow rate, electrical conductivity, and nitrogen levels. The results also show that location choice, product, and service quality can affect production costs by 5–25 %. These insights contribute to a holistic understanding of hydroponics as a PSS, offering practical guidance for businesses, policymakers and researchers to enhance the commercial viability of hydroponic farming and promote sustainable food production.