This measure calculates gross margin return on investment (GMROI), by dividing business entity gross margin by its average cost of inventory. This Process Efficiency measure is intended to help companies minimize waste and refine resource consumption related to the process "Evaluate and manage financial performance".
Gross Margin Return on Investment (GMROI)
Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.
The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.