Assuming she takes two weeks of vacation, her total available hours for the year is 2,000. In a given week, she has 40 available hours. Let’s say we want to find the utilization rate for Leslie, a front-end developer at a web design firm. Total Billable Hours / Total Hours Available Here’s the formula to calculate utilization:
How to calculate ppm cost dollars how to#
In this article, we'll cover the definition of resource utilization, the utilization rate formula, what we can learn from utilization rates, what an ideal utilization rate is and how you calculate it, and how to raise utilization rates. While utilization rate is generally applied to people, not objects, you get the idea.
The difference between the number of widgets it can make compared to the number of widgets it makes is the basis for the machine's utilization rate. This means it will never make as many widgets as it's capable of producing. It needs to shut down occasionally for maintenance and repairs, user training, and any number of other reasons. But of course, it can't run non-stop, every day, all day. That's the machine’s total available capacity. Let's say, assuming the machine runs non-stop, it can produce 1,000 widgets a day. The machine has a maximum number of widgets it can produce in a day, because it takes a certain amount of time for the machine to manufacture one widget. To understand utilization and utilization rates, let’s imagine we have a widget-making machine.
Smartsheet platform Learn how the Smartsheet platform for dynamic work offers a robust set of capabilities to empower everyone to manage projects, automate workflows, and rapidly build solutions at scale.