A good starting point for instance count analysis in production systems (test use is usually not representative) is a view of the ArcGIS Server Services statistics.
➢Open ArcCatalog and navigate to GIS Servers
➢Connect to you local ArcGIS Server
➢Right-click the connection and go to Server Properties
➢Switch to tab Statistics
➢Choose the Service from Host you want to analyze
➢Choose the interval since last instance change
➢Press Show Statistics button

ArcGIs Server Statistics
Have a look at the average usage time (Service Usage Time section) and average wait time (Service Wait Time section).
We would recommend an increase of the minimum instances by 1 if the average wait time is longer than 500ms and a decreasing by 1 if it is shorter than 100ms.
We recommend not to increase or decrease by more than one instance at a time and always have a representative time span to reanalyze the changes. This way side effects (e.g. impact on other services) can be minimized.