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How To Measure Resource Utilization For A Project

Peter Landau
Publication date:
April 26, 2022
Article Summary: 

How To Measure Resource Utilization For A Project

Resource utilization is a resource planning metric that measures the utilization rate of resources over a period of time. It is often confused with resource allocation, which is the process by which a project manager picks and assigns resources for tasks throughout the project life cycle. There are different utilization rates to measure which can be used for different resource planning purposes. The utilization rate formula is used when project managers need to assess how profitable their resource utilization is which is done by comparing billable hours against the total available hours of a worker. Capacity utilization rate is calculated by using the capacity utilization rate formula, which is an average of your employee's current utilization rate.

Optimal utilization rate is the ratio of resource costs to overhead costs and profit margin. The ideal utilization rate formula balances resource costs, overhead cost and profit margin with total available hours and the ideal billable rate, which is the price you charge customers. Knowing resource utilization is important for resource scheduling, costs and making decisions. It also provides visibility into your project and allows you to catch risks before they develop into problems. This means that you're going to get more bang for your buck and add money to your bottom line.


resource utilization, resource allocation, project manager, project management, capacity utilization rate, optimal utilization rate, project management software

Source Citation: 
Peter Landau
How To Measure Resource Utilization For A Project
April 26, 2022
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