Abstract: A method for maximizing a utility of a service contract by optimizing target response time for a performance service level objective is provided. A set of criteria are provided to ensure that performance requirements for the service are met. The method comprises determining one or more usage windows for providing a service, wherein each usage window is associated with a performance requirement and a time period; extracting usage patterns for each usage window based on historical data provided from monitoring requests for service in each usage window; extracting response time per transaction associated with said requests based on historical data provided from monitoring responses provided to said requests in each usage window; and calculating optimal probability for breach in each usage window (Pi) and determining the associated target response time, based on the usage pattern for each window and the response time per transaction.