The term ‘investment’ is used because capital employed is equivalent to the money invested in the business. ROI can also be seen as the outcome of profitability and asset utilisation:
Let us look at the detail behind each of these ratios, and the way they fit in with each other. Figure 3.1 gives a family tree of the way return on investment is made up. Let us look at the potential for improving each from a point of view of man-aging the supply chain better.