The Elsmar Cove Forum and Site Map The Elsmar Cove Wiki More Free Files The Elsmar Cove Forums Discussion Thread Index Post Attachments Listing Failure Modes Services and Solutions to Problems Elsmar cove Forums Main Page Elsmar Cove Home Page

Pareto Principle

From Elsmar Cove Quality Assurance and Business Standards Wiki
Jump to: navigation, search

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


Pareto on Wikipedia