BIZ-OMICS · Capacity Utilisation 3D
BIZ-OMICS · 3D Learning · Operations

Capacity Utilisation 3D

The Harbour Hotel has 60 bedrooms. Change how many are sold tonight and watch the windows light up, the utilisation rate change and the cost of each room night fall as fixed costs are spread more thinly.

Tonight: 39 of 60 rooms sold
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Rooms sold
39 rooms
Try a night
Capacity

5 bedroom floors · 60 rooms · fixed costs £4,400 a night

The formula

Capacity utilisation = current output ÷ maximum possible output × 100

Quick calc

What can the manager do?

If utilisation is too low

  • Promote off-peak deals or cut prices on quiet nights.
  • Find new customers, such as conferences or business travellers.
  • Rationalise: close or sell spare capacity, such as a floor.
  • Rent spare space to other businesses.

If it is close to 100% too often

  • Increase capacity, for example by building an extension.
  • Subcontract: send overflow guests to a partner hotel.
  • Raise prices at peak times to manage demand.
  • Plan maintenance and refurbishment for quieter weeks.