What is utilization?

  • (noun): The state of having been made use of.
    Example: "The rate of utilization"
    See also — Additional definitions below


In equipment and tool rental companies, utilization is the primary method by which asset performance is measured and business success determined. In basic terms it is a measure of the actual revenue earned by assets against the potential revenue they could have earned. Rental utilization is divided into a number of different calculations, and not all companies work precisely the same way. In general terms however there are 2 key calculations: the physical utilization on the asset, which is measured based on the number of available days for rental against the number of days actually rented. (This may also be measured in hours for certain types of equipment), and the financial utilization on the asset (referred to in North America as $ Utilization) which is measured as the rental revenue achieved over a period of time against the potential revenue that could have been achieved based on a target or standard, non-discounted rate.

Read more about Utilization.

Some articles on utilization:

Capacity Utilization - Economic Significance
... If market demand grows, capacity utilization will rise ... If demand weakens, capacity utilization will slacken ... Economists and bankers often watch capacity utilization indicators for signs of inflation pressures ...
Profitability in Relation To Rental Utilization
... Utilization in this context is heavily linked to profitability ... Low physical utilization may be mitigated by keeping rental rates high, high physical utilization normally justifies keeping rental rates lower ... Different types of equipment may also alter the relationship between rates and utilization ...
ARUP Laboratories - Laboratory Informatics and Utilization Management
... ARUP's suite of Utilization Management Services is a comprehensive approach designed to unite the development of outreach and connectivity with the appropriate ordering and ...
Chabařovice Lake - Utilization
... Future utilization as recreational and sporting area – bathing, swimming, fishing, sailing, bike route, roller skating, jogging, horse riding etc. ...
St. Joseph's Medical Center (Tucson, Arizona) - Utilization
... Utilization 18,474 Discharges 81,081 Patient Days 4.39 Average Length of Stay in days 156,841 Outpatient Visits (Includes emergency visits and outpatient surgeries) 77,563 ER Visits 5,416 ...

More definitions of "utilization":