1 / 8

Return on Investment Study

Return on Investment Study. Theodora Michaelidou Pratima dutta Peter van leusen. Introduction. Gains Prior to implementation of Intervention (March 2007) Total Costs = $150,000 Total Sales = $500,000 Profit= $350,000. The Intervension. Summary of the intervention- process:

carter
Download Presentation

Return on Investment Study

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Return on Investment Study Theodora Michaelidou Pratima dutta Peter van leusen

  2. Introduction • Gains Prior to implementation of Intervention (March 2007) • Total Costs = $150,000 • Total Sales = $500,000 • Profit= $350,000

  3. The Intervension • Summary of the intervention- process: • Decision to implement new inventory system • implementation period = 40 days • Purchase and installation of new equipment • computers, network, server, printers, software, etc. • Training of employees • # of workshops, # of employees

  4. The Return on Investment analysis • A broad set of techniques for the evaluation of an intervention • The costs and the benefits of the intervention are both measured in monetary terms • The return on investment is then estimated based on the values of the costs and the benefits with a formula

  5. The Costs

  6. The Benefits • situation after implementation of inventory system (March 2008) • Total Costs = $100,000 • Total Sales = $620,000 • Profit= $520,000 • Comparison Table:

  7. The Return on Investment (ROI) • ROI = (Total gains – Total Cost of Investment) / Total Cost of Investment • Total Gains = $170,000 • Total Cost of Investment = $114, 000 • ROI = ($170,000 - $114,000) / $114,000 = $56,000 / $114,000 = 0.49 = 49 % • As this number shows, the company experiences a significant return on its training program investment.

  8. Conclusions • Was the intervention successful? • The planned actions impacted the outcome • The total sales of the company have increased and the total costs have decreased • A Return on Investment (ROI) of 49% is excellent! • The ROI analysis does not show that the interventions were the actual cause of the change • However, it is important to conduct a more detailed ROI analysis for the entire year to see if the intervention was worthwhile in the long run

More Related