Which term describes a situation where the reservation costs you more than the savings you would realize?

• A. Wasted Usage
• B. On-Demand Rate
• C. Reservation Waste
• D. Savings Potential

Answer: (C)

The concept being tested is wasted investment from mismatched reservations and actual usage. When you purchase reservations, you’re paying upfront for capacity with the expectation of savings over on-demand pricing. If your real usage is lower than what you reserved, you’ve spent more than the savings you realize because you’re paying for unused capacity. This situation is called reservation waste — it captures the paying-for idle reserved capacity.

The other terms don’t fit as precisely. Wasted usage is a broader idea of underutilized resources but isn’t the standard label for the loss tied specifically to unused reserved capacity. On-demand rate describes paying strictly for what you use with no reservations, so it doesn’t describe the waste from overcommitting. Savings potential refers to possible future savings rather than actual waste from a current reservation decision.

To avoid reservation waste, improve forecasting, right-size reservations, or choose flexible options that align more closely with actual demand.