Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Idle Time

What it is:

Also called down time, idle time is when employees or machines are not working but are being paid.

How it works (Example):

Let's say Company XYZ manufactures autos. The machine that installs windshields breaks, which holds up the whole line. While the company fixes the machine, everybody else is unable to continue working, creating idle time.

Why it Matters:

Idle time is extremely expensive because money is being paid to people who are creating no revenue or profit in return. For this reason, companies work hard to minimize idle time, both by ensuring that key machinery and people are in proper working order and by analyzing production processes to ensure that everyone always has something to do.