Shrinkage Calculation Breakdown

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Hi. In an article it states the correct way to calculate shrinkage is as follows "70/(1-0.3) = 100." Can you break the calculation down for me as we typically state shrinkage is 30% and when others complete the calculation, we are told our staffing requirements are incorrect.

If you can tell me the definition/purpose of each number in the equation, it will be beneficial.



Call Centre Helper

Start with 100 then take off the shrinkage.
So if you have 100 and take off 30% shrinkage then you get 70.

The reason why you divide is that if you start with 70 and simply add on 30% you get 91 (which is wrong) - [30% of 70 is 21 , add on 70 = 91]

So the formula is 70 x 100 /(100-30) = 100

Which if you divide top and bottom by 100 can be written as 70 x 1 (1-0.3) = 70 / 0.7 = 100

I hope that helps

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