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Pareto Principle (80/20 rule) |
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Description of Pareto Principle (80/20 rule). Explanation. |
Definition Pareto Principle (80/20 rule). Description.
The Pareto Principle (80/20 rule) states that for many phenomena 80% of consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places.
Some of these applications include:
The principle was suggested by management thinker Joseph M. Juran. He named it after the Italian economist Vilfredo Pareto, who observed in 1897 that 80% of property in Italy was owned by 20% of the Italian population.
The principle can be viewed as recursive, Tipton Cole has observed that the Pareto Principle applies to the residue of its first application, yielding a "96-36" rule.
Compare also: Root Cause Analysis |
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End of description Pareto Principle (80/20 rule). An explanation. |
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