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Right-sizing scales the instance to the target utilisation, so the cost ratio is current utilisation divided by target. Because cloud instance families double in size and price at each step, the practical move is a whole number of steps down — each step halves both capacity and cost, so a workload at 14 percent utilisation can usually drop two sizes.
Right-sizing
size ratio = current utilisation / target utilisation; new cost = current cost x ratio; steps down = floor(log2(1 / ratio))
Yes, and it often blocks downsizing. An instance at 14 percent CPU but 80 percent memory cannot be halved without changing to a memory-optimised family.
Right-size against the sustained peak, not the average, and keep enough headroom for the largest expected spike. Targeting 55 percent leaves roughly 80 percent of a step in reserve.