Pareto Principle

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Revision as of 07:33, 6 April 2008 (edit) Aurel (Talk | contribs) (→See also) ← Previous diff		Current revision (17:18, 23 April 2008) (edit) (undo) ScottCatron-5977 (Talk | contribs) (clean up)
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-	Pareto Principle 80/20 Rule (aka 80:20 Rule or 80 20 Rule)	+	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 events, 80% of the effects comes from 20% of the causes. Business management thinker [[Joseph Juran]] suggested the principle and named it after Italian economist [[Vilfredo Pareto]], who observed that 80% of income in Italy went to 20% of the population. Later, Pareto discovered that the principle was valid in other parts of his life, such as gardening: 80% of his garden peas were produced by 20% of the peapods.
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-	Vilfredo Pareto was an economist who is credited with establishing what is now widely known as the Pareto Principle or 80/20 rule. When he discovered the principle, it established that 80% of the land in Italy was owned by 20% of the population. Later, he discovered that the pareto principle was valid in other parts of his life, such as gardening: 80% of his garden peas were produced by 20% of the peapods.	+
	Some example 80/20 Rule Applications		Some example 80/20 Rule Applications
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	# 80% of delays in schedule arise from 20% of the possible causes of the delays.		# 80% of delays in schedule arise from 20% of the possible causes of the delays.
	# 80% of customer complaints arise from 20% of your products or services.		# 80% of customer complaints arise from 20% of your products or services.
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-	(The above examples are rough estimates.)
	== See also ==		== See also ==
-	Related Elsmar Cove Forum [http://Elsmar.com/Forums/search.php?do=process&titleonly=1&query=pareto Pareto Discussion Threads]	+	*Related Elsmar Cove Forum [http://Elsmar.com/Forums/search.php?do=process&titleonly=1&query=pareto Pareto Discussion Threads]
-		+	*[[Pareto analysis| Pareto Analysis]]
-	[[Pareto analysis| Pareto Analysis]]	+	*[[Pareto Chart]]
-		+	*[[Pareto Diagram]]
-	[[Pareto Chart]]	+	*[[Vilfredo Pareto]]
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-	[[Pareto Diagram]]	+
-		+
-	[[Vilfredo Pareto]]	+
	== References ==		== References ==
-	[http://en.wikipedia.org/wiki/Pareto Wikipedia]	+	[http://en.wikipedia.org/wiki/Pareto Pareto on Wikipedia]

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Current revision

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 events, 80% of the effects comes from 20% of the causes. Business management thinker Joseph Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. Later, Pareto discovered that the principle was valid in other parts of his life, such as gardening: 80% of his garden peas were produced by 20% of the peapods.

Some example 80/20 Rule Applications

1. 80% of process defects arise from 20% of the process issues.
2. 20% of your sales force produces 80% of your company revenues.
3. 80% of delays in schedule arise from 20% of the possible causes of the delays.
4. 80% of customer complaints arise from 20% of your products or services.

See also

• Related Elsmar Cove Forum Pareto Discussion Threads
• Pareto Analysis
• Pareto Chart
• Pareto Diagram
• Vilfredo Pareto

References

Pareto on Wikipedia