Enter the output and total capacity into the calculator to determine the utilization rate. This calculator can also evaluate any of the variables given the others are known.
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Utilization Rate Formula
The following formula is used to calculate the utilization rate.
UR = (O / TC) * 100
Variables:
- UR is the utilization rate (%)
- O is the output produced by the resource
- TC is the total capacity or potential output that could be produced by the resource
To calculate the utilization rate, divide the output produced by the resource by the total capacity or potential output that could be produced by that resource. Multiply the result by 100 to convert the rate to a percentage. A high utilization rate indicates that resources are being used efficiently, while a low rate may suggest inefficiency or underuse.
What is a Utilization Rate?
A utilization rate is a metric used in business to determine the efficiency or effectiveness of a particular resource. It is typically calculated by dividing the amount of output produced by a resource by the total capacity or potential output that could be produced by that resource. This rate can be used to measure the productivity of employees, machinery, or other assets within a company. A high utilization rate indicates that resources are being used efficiently, while a low rate may suggest inefficiency or underuse.
How to Calculate Utilization Rate?
The following steps outline how to calculate the Utilization Rate.
- First, determine the output produced by the resource (O).
- Next, determine the total capacity or potential output that could be produced by the resource (TC).
- Next, use the formula UR = (O / TC) * 100 to calculate the Utilization Rate.
- Finally, calculate the Utilization Rate.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
output produced by the resource (O) = 75
total capacity or potential output that could be produced by the resource (TC) = 100
