[80-20 Pareto Principle] 80% of the effects come from 20% of the causes
[This is not the original text from the author]
The Pareto precept (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) is an empirical phenomenon observed in some areas that states that, for many events, roughly 80% of the outcome (outputs) come from 20% of the causes (inputs).
The 80-20 axiom is frequently used in business and economics, but the concept can be applied to many field—such as sports, wealth distribution, spending habits, and even criminology.
The 80/20 law is a fundamental tool in quality management. It allows to :
- Prioritize problems according to the number of occurrences
- Set priorities in dealing with problems.
In other words, acting on 20% of causes allows to solve 80% of the problem. The pareto is useful to identify which cause to act on first in order to significantly improve the situation, analyze the frequency of problems or defects in a process or broad causes by examining their individual components.
Software development: 80% of software crashes are linked to 20% of bugs.
Distribution of wealth: The first observation made by Pareto himself, at the end of the 19th century in Italy: 20% of the people hold 80% of the wealth.
Clothing : You use 20% of your clothes 80% of the time
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