Criticisms of Return on Investment as the Only Performance Measure

question 60

Multiple Choice

Criticisms of return on investment as the only performance measure include:

• A) ROI focuses on short-term decisions.
• B) ROI is focused on only one component of the value chain.
• C) Managers evaluated based only on ROI are sometimes motivated not to make an investment that is in the best interest of the organization as a whole.
• D) All of the above.

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Definitions:

Variation

The occurrence of differences or deviations within processes, products, or data sets.

Longest Processing Time

A scheduling heuristic used in operations research for sequencing jobs to minimize the total time taken.

Most Profitable

Referring to the activity, product, or segment that generates the highest profit margin or net income compared to others.

ISO 9000

An international standard that specifies criteria for a quality management system, demonstrating an organization's ability to consistently provide products and services that meet customer and regulatory requirements.