Open AccessEvaluation of the Impacts of Customers’ Behavior on Utility Firms Revenue
Author(s) -
Desmond Eseoghene Ighravwe,
Daniel Mashao
Publication year - 2021
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/1107/1/012004
Subject(s) - revenue , disconnection , revenue model , business , marginal revenue , estimation , grid , order (exchange) , industrial organization , microeconomics , marketing , economics , finance , management , geometry , mathematics , political science , law
As the world embraces the fourth industrial revolution, the relationship between customers and their clients will change. The rate of this change might vary from one organization to another; revenues from existing or new businesses that refuse to embrace this revolution will experience a steady decrease. Utility firms, whose operations are affected by this revolution, must devise a means of estimating the number of customers that will deflect from a grid. This article, therefore, presents a system dynamics (SD) model for utility firms’ revenue estimation. The model was used to study the relationship among the parameters that influence households’ connection and disconnection from a grid. A case study of households in South Africa was used to test the proposed model applicability. We observed that the model responses to change in internal and external parameters that affect utility firms’ revenue. When the administrative factor is 0.4, less number of households disconnect from the grid when it was compared with an administrative factor of 0.6. In addition, there was an increase of 12.04% in revenue when the administrative factor was changed from 0.4 to 0.6. Also, there was a 15.16% increase in revenue when the technological advancement factor was changed from 0.4 to 0.6. The model’s results show that it can be used to support a decision-making process in a utility firm.