Suppose a service process has the following metrics: Total Direct labor Content = 280, Process Cycle Time = 65, and Number of Workers = 6. What would the Direct Labor Utilization be?

The Direct Labor Utilization is:

71.8%

Explanation:

Data and Calculations:

Total Direct labor Content = 280

Process Cycle Time = 65

Number of Workers = 6

Available labor time = Process Cycle Time * Number of Workers

= 65 * 6 = 390

The Direct Labor Utilization = Direct labor content/Available labor time * 100

= 280/390 * 100

= 71.8%

The direct labor utilization rate shows the usage of direct labor for actual production as opposed to idle time.

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