The Pareto Principle (or 80/20 Rule) is the general principle that specifies an unequal relationship between inputs and outputs in which the majority of influence (80%) on an outcome is exerted by a minority of input factors (20%). The Pareto Principle is the originally proposed by Vilfredo Pareto in the 19th century shown approximately 80% of the land in Italy was owned by 20% of the population. The Pareto Principle refers to the 80% of any problem is accounted for by 20% of the factors, or 80% of sales come from 20% of clients in business management. Hence, it would be wise to concentrate on the vital few rather than the trivial many.
Reference Definition by Investopedia: The principle states that 20% of the invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes; this is also referred to as the “Pareto rule” or the “80/20 rule.” This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. For instance, the efforts of 20% of a corporation’s staff could drive 80% of the firm’s profits. In terms of personal time management, 80% of your work-related output could come from only 20% of your time at work. In Pareto’s case, he used the rule to explain how 80% of the wealth is controlled by 20% of the country’s population.
Related Definitions in the Project: The Project Management
