pareto efficiency

What is Optimum Utilization of Resources?

Learn about Optimum Utilization with Amrita Rao
Love U Mr. Kalakaar 2011

Movie Case Study

The scene that you saw shows Ritu Diwan (played by Amrita Rao) explaining the concept of optimum utilization of resources to Saahil (played by Tusshar Kapoor). Saahil is an artist and while painting, Ritu asks him, what’s his approach when he runs out of green color. Saahil answers that he mixes blue and yellow colors to make the green shade.

She points out that, this is exactly what the optimum utilization of resources looks like. Saahil further demonstrates this learning, at his office as he tries to understand where the resources are being utilized when he returns the cheque.

In this blog, Learning Perspectives will explore the meaning of Optimum utilization of resources.

What is Optimum Utilization of Resources?

Optimum utilization of resources is a concept in Economics and Management and can be applied in businesses. Management principles are helpful in the optimum utilization of resources. Optimum Utilization of resources means using the resources available at hand and making best use of them. Similar to the scene that you saw, when Saahil runs out of green color, he mixes two different shades to make green color. In the process, he is using the resources (paints) available to him and making the best use of them.

Management Principles

Optimum Utilization of resources is also a management principle. There can be many resources of the company such as employees and all assets of the business. It helps the company control any wastage of resources. It further helps the company to build balance and allocate resources in the right places. It also communicates to the employees to maintain a healthy work environment. Management principles were given by Fayol. Following are the 14 principles of Management.

What is Optimum Utilization of resorces?
Management Principles

In Economics, resources are capital and labor which if utilized correctly can increase efficiency in production. Since resources are scarce, one needs to use these resources efficiently.

Economic efficiency is achieved in society when goods and services are produced and people are ready to buy these with their current income. However, optimum utilization refers to using the best alternative course of action, given the situation. Similar to the scene that we saw.

optimum utilization of resources

Optimum utilization of resources can lead businesses toward success. It also helps managers and leaders understand where the company is overspending and under-performing. This utilization can be understood in many aspects of business too. We saw the scene which showed how Saahil wanted to understand where are the various resources spent before signing the cheque. Similarly, employees are resources of an organization, and utilizing them efficiently is one of the main requirements of the manager.

Advantages of Optimum Utilization of Resources:

Reduction of Costs:

When resources are effectively used in a company, it leads to cost reduction. Practical usage of skills, knowledge, and talent of employees helps in reducing wastage, and results are achieved smoothly.

No Confusion:

When there is optimum utilization of resources, there is uninterrupted functioning and coordination can be witnessed. There is a division of work and proper responsibility and accountability of work. This is driven by top management which has the authority and delegation powers.

Adaptable to Change:

Organizations become adaptable to change as optimum utilization helps in looking for alternative ways to improve the given condition. The company also becomes aware of changing consumer demands and the supply in the market. It quickly changes and thrives.

Understand Optimum Utilization of Resources with a Video


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