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Pareto Analysis

Pareto Analysis

There are many situations where you are asked to decide which problems or causes of a problem should be tackled first. The Pareto Principle, which is also referred to as the 80-20 rule, states that roughly 80 percent of the problems or effects come from 20 percent of the causes. It describes a statistical phenomenon that a small number of high values contribute more to the total than a high number of low values. The focus of the Pareto Analysis is to identify the “vital few” from the “trivial many” and make it possible to attack the 80 percent of the problems to obtain the maximum benefits.

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