This paper, based on the original ROI model presented by David M Miller, presents an improved ROI model. Considering the quantitative relationship in which the change in the total factor productivity and other factors, such as price, exerts influence on profitability in industrial enterprises, the authors have constructed a multi-hierarchical productivity analysis and measurement system. By using the proposed model, the results from the analysis and measurement of a state-ownedindustrial enterprise are also shown in the paper.