Question

In: Finance

explain how utilization rates are related to volume and revenue generation

explain how utilization rates are related to volume and revenue generation

Solutions

Expert Solution

Utilization rates are related to volume and revenue generations as higher untilization rate leads to higher revenue and profitability.

It is the rate used by the firms to measure the time, capacity, efficiency, and productivity of the employees, which results in increase in the company revenue, and corporate growth.

It can be obtained by dividing the total number of billable hours by a fixed number of hours.

Utilization rates indicates about the efficiency and productivity of all the team members. It also helps to improve the productivity levels in case if someone is not into the pace.

-Helps and motivate Employeed to achieve their goal.

- Identifies workflow inefficiencies and provides steps to tackle these inefficiencies.

- Increase revenue generation.

- increases volume generation,

- improves business planning.

- increases profitability.

- Identifies strength, weaknesses and gaps in revenue generation.


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