A principle that states that, in many situations, a small number of causes account for most of the problems, while most of the causes account for only a few of the problems. (See also 80/20 Rule.)
a technique which argues that relatively few causes account for the greater part of an effect. Also known as the 80-20 rule. Also see our Pareto Analysis eResource.
A rule which states that where there is a large number of contributors to a result, the majority of the outcome is due to a minority of the contributors. Also know as the ‘80/20 rule', an example is where 80% of revenue comes from only 20% of lines.
Amongst Pareto's many economic analysis laws and principles was the observation that income, whatever the political and taxation conditions, will be distributed in the same way in all countries - 20% of earners will receive 80% of the income. This has been extended generally to many situations e.g. 20% of sales calls produce 80% of the income.
Also known as the 80/20 rule. This states that 80 percent of your business revenue comes an 20 percent of your customers. Practically speaking, it means you should focus your efforts on the 20% and retain their long-term loyalty.
Named after Vilfredo Pareto, the 19th-Century economist and sociologist, the Pareto Principle is also known as "the 80:20 rule." It says that 80 percent of an enterprise's revenue comes from 20 percent of its customers. In practical terms, though, it might be 90 percent of the revenue coming from 5 percent of the customers, or 60 percent coming from 30 percent of customers, depending on the firm's Valuation Skew of its customer base.
80 percent of results flow from just 20 percent of our efforts.
aka Pareto Principle 80:20 Rule or 80 20 Rule
The idea that a few root problems are responsible for the large majority of consequences. The Pareto principle is derived from the work of Vilfredo Pareto, a turn-of-the-century Italian economist who studied the distributions of wealth in different countries. He concluded that a fairly consistent minority, about 20% of people, controlled the large majority, about 80% of a society's wealth. This same distribution has been observed in other areas and has been termed the Pareto principle. It is defined by J.M. Juran as the idea that 80% of all effects are produced by only 20% of the possible causes.
The heuristic rule, which states that where there is a large number of contributors to a result, the majority of the result is due to a minority of the contributors. Sometimes known as the 80/20 rule) which states that, in many cases, approximately 80% of the turnover (stock etc.) can be attributed to approximately 20% of the customers, articles or orders. The actual ratio in a particular case can be determined by ranking the customers and products etc. in order of magnitude and then calculating what percentage of the turnover (stock etc.) corresponds to 10%, 20% 30% etc. of the customer and products etc. The basis of ABC analysis.
The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that for many phenomena, 80% of the consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places, but it is commonly misused. For example, it is a misuse to state that a solution to a problem "fits the 80-20 rule" just because it fits 80% of the cases; it must be implied that this solution requires only 20% of the resources needed to solve all cases.
