Service Cost per Hour
Category: Operational
Calculates the average cost of delivering one hour of service, including labor, parts, and overhead.
What it Measures ?
How much we spend per hour of service.
Relevant StakeHolders
Finance, Ops Heads
Why it Matters ?
Monitors cost efficiency per service hour.
In-depth Use Case / Real-world Example
To determine this, total service-related costs over a period are divided by the total hours of service delivered. In a factory support context, if a team spent 500 hours servicing machines at a total cost of ₹5,00,000, then the cost per hour is ₹1,000. Tracking this helps identify cost leaks and inefficiencies in resource allocation. Reducing this value while maintaining quality means the organization is optimizing both workforce and material usage.
Sample Formula
Total Service Cost / Total Hours Worked