What type of financial measure can be used to compare the value of quality improvement...

Return on Investment (ROI) is a widely used financial metric that measures the profitability of an investment. It is expressed as a percentage and is calculated by dividing the net gain (profit) from an investment by the cost of that investment. The formula for ROI is:

[ ROI = \frac{{\text{{Net Gain from Investment}}}}{{\text{{Cost of Investment}}}} \times 100% ]

In the context of quality improvement projects, ROI provides a way to assess the financial impact of process enhancements, quality initiatives, or other improvement efforts. By comparing the ROI of quality improvement projects with other company investments, organizations can prioritize and allocate resources effectively. A positive ROI indicates that the project generated more value than its cost, while a negative ROI suggests that the investment did not yield sufficient returns.

References:

ASQ Certified Manager of Quality/Organizational Excellence Certification Handbook. Retrieved from ASQ2.