Return on Investment (ROI) the TOC Way

Periodic T, I and OE are used in order to assess the ROI of the company through the use of the formula:


When judging the incremental impact of a decision that contains additional investment the marginal ROI is calculated through the formula:

Marginal ROI = ∆NP/∆I = (∆T-∆OE)/∆I


Source: Oded Cohen and Jelena Fedurko, Theory of Constraints Fundamentals, 2012