Business Terms Dictionary

Return On Investment (ROI)

A financial metric used to evaluate the profitability of an investment, calculated as the ratio of net profit to the initial investment cost.

What is it used for?


In supply chain management, ROI is often used to measure the impact of inventory strategies, technology implementations, and process improvements on overall business performance. A higher ROI indicates better efficiency and financial returns.


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Optimizing inventory without tying up excess capital is key to improving ROI. ForgeFlow Cloud ERP’s DDMRP system helps reduce unnecessary inventory, shorten lead times, and improve service levels—all of which lead to a higher return on investment by freeing up cash flow and reducing operational costs.
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