The supply manager is looking for the supplier that is most efficient in its use of assets, which is measured by the return on assets (ROA). ROA is calculated as net income divided by total assets.
For each supplier:
* Supplier A: ROA = 100 / 100 = 1.0
* Supplier B: ROA = 200 / 100 = 2.0
* Supplier C: ROA = 200 / 400 = 0.5
* Supplier D: ROA = 50 / 20 = 2.5
Supplier D has the highest ROA, indicating it is the most efficient in its use of assets.
References
* Financial Management for Supply Chain Management by Michael D. Waters
* Principles of Corporate Finance by Richard A. Brealey, Stewart C. Myers, and Franklin Allen