Labour Capacity utilization Example

Labour Capacity utilization Example

Labour Capacity Utilization is calculated by the following formula. The concept of labour utilization has been explained with an example

Labour Capacity utilization Ratio =   Hour Spent by Labour   x 100

                                                  Total Available hour

Example

Hours available for a project were = 1400

Actual Hour Spent = 1000

What has been Labour Capacity utilization?

Solution

Labour Capacity utilization Ratio =   Hour Spent by Labour   x 100

                                                      Total Available hour

=(1000/1400) x 100

=71.42%

This example shows that only 71.42% of total resources available were utilized.