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The Pareto Analysis

Pareto analysis - a method that helps to set priorities for addressing the root problems of the company. V. Pareto defined that 80% of the effect is caused by only 20% of the causes. If we want to eliminate 80% of the losses, focus activities only predefined problems in the range of 20%.

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Pareto Principle

Vilfredo Pareto, Italian economist define Pareto principle. He found that 80% of assets in Italy is held by 20% of the population. Pareto principle reads 80% effect is caused by only 20% of the causes. If we want to eliminate 80% of the losses, focus activities only predefined problems in the range of 20%.