Rental Utilization model

The Rental Utilization model analyzes the equipment usage of the business. Both time and monetary values are used to analyze the performance of the business. The utilization can be analyzed by a machine or a group of machines, by division, by facility, by calendar (time), and so on.

This model supports comparisons of actual value vs potential value. A number of KPIs and metrics are associated with utilization, but in general terms, there are two key calculations:

• Time (physical) utilization on the assets, which refers to the time the equipment is actually rented out compared to the number of available rental days. The higher the time utilization, the more the equipment is being rented out.
• Financial utilization on the asset, which is measured as the rental revenue achieved over a period of time against the potential revenue that could have been achieved.

This model provides insights into these topics:

• Underutilized equipment that take up valuable space within the warehouse
• Over-utilized equipment that leads to equipment shortages and re-rents