80-20 Rule Pareto Principle | Meaning and Definition

 Pareto 80 20 rule is a well-known principle that 80 percent of the consequences or outputs originate from only 20% of the actions or inputs. The Pareto 80 20 rule, the law of the vital few, and the concept of factor sparsity are all names for the Pareto principle. This Pareto Principle, often known as the 80/20 rule, may be found in sales, marketing, project planning, and other aspects of a company.

Application Of The Principle

The Pareto principle is illustrated in a Pareto chart by mapping frequency, assuming that the more frequently something occurs, the greater the effect on the outcome.

Pareto efficiency is a resource allocation balance in which one person’s situation cannot be improved without jeopardizing the situation.

A Pareto improvement is a form of aid that benefits one person while incurring harm to another.

The 96-minute rule is another application of the 80-20 Pareto principle, which states that highly educated people should commit themself to their most critical duties for that amount of time each day to increase production.