Thursday, September 10, 2009

The Pareto Principle (Pareto's law) - The 80/20 Rule

The Pareto Principle suggests that where two related data sets or groups exist (typically cause and effect, or input and output):

Here are some examples of Pareto's Law as it applies to various situations. According to the Pareto Principle, it will generally the case (broadly - remember it's a guide not a scientific certainty), that within any given scenario or system or organisation:

80 percent of results come from 20 percent of efforts
80 percent of activity will require 20 percent of resources
80 percent of usage is by 20 percent of users
80 percent of the difficulty in achieving something lies in 20 percent of the challenge
80 percent of revenue comes from 20 percent of customers
80 percent of problems come from 20 percent of causes
80 percent of profit comes from 20 percent of the product range
80 percent of complaints come from 20 percent of customers
80 percent of sales will come from 20 percent of sales people
80 percent of corporate pollution comes from 20 percent of corporations
80 percent of work absence is due to 20 percent of staff
80 percent of road traffic accidents are cause by 20 percent of drivers
80 percent of a restaurant's turnover comes from 20 percent of its menu
80 percent of your time spent on this website will be spent on 20 percent of this website
and so on..

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