A Six Sigma team is asked to calculate the Return on Investment (ROI) on a new training project to be implemented across the organization. The new training project would cost $600,000 over a period of 3 years and would involve 120 employees. The income from the project, including revenues and money saved, will be approximately $1.2 million in that same period. What is the ROI of this project?

Question

Quizplus · Accepted Answer

The ROI of this project is 100. The solution is as follows:
ROI = [(Financial value ? Project cost) / Project cost] × 100
ROI = [(1,200,000 ? 600,000) / 600,000] × 100
ROI = [600,000 / 600,000] × 100
ROI = 1 × 100
ROI = 100
Key Takeaway: Return on Investment (ROI) takes into account both the cost and income of a project as a ratio. It is not the same as the revenue, which is a simple income minus cost calculation. The cost of a project is all the funds that are necessary to develop and implement it, while its income is the money gained and/or saved.

A Six Sigma Team Is Asked to Calculate the Return