The Pareto Principle : Applying the 80/20 Rule to Your Business

Abyad , Abdulrazak

doi:10.5742/MEJB.2021.93880

Article Details

The Pareto Principle : Applying the 80/20 Rule to Your Business

Authors:

Abyad , Abdulrazak

Publisher:

medi+WORLD International

Main Topics:

Economics and Finance

Journal:

Middle East Journal of Business 2021 Vol.16 Issue 1, pp.6-9

Document Type:

Article

Publication Date:

4/2021

Document Language:

English

Document ID (Org No.):

246046

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2021.93880

Descriptors:

Abstract:

 The Pareto principle (also known as the 80-20 rule, the lawof the vital few and the principle of factor sparsity) statesthat for many phenomena, 80% of the consequencesstem from 20% of the causes. What Pareto’s Principle tellsus is that we must focus on the right areas to get results.The principle is named after Italian economist VilfredoPareto who observed that 80% of income in Italy wasreceived by 20% of the Italian population. In marketing,20% of clients are responsible for 80% of sales volume. Inmany processes, 80% of the resources are typically usedby 20% of the operations. Sometimes, 80-20 may evenbecome 90-10. Thus, in software engineering, 90% of theexecution time of a computer program is spent executing10% of the code. Pareto’s Principle helps focus managementattention on critical areas. It is the basis for thePareto chart, one of the key tools used in TOTAL QUALITYCONTROL and SIX SIGMA. The Pareto Principle serves asa baseline for ABC-analysis and XYZ-analysis, widely usedin logistics and procurement for the purpose of optimizinginventory and order quantity. The principle of TIPPINGPOINT, coined by Malcolm Gladwell can be considered tobe an extreme version of the 80-20 principle.

Article Details

The Pareto Principle : Applying the 80/20 Rule to Your Business

Authors:

Abyad , Abdulrazak

Publisher:

medi+WORLD International

Main Topics:

Economics and Finance

Journal:

Middle East Journal of Business 2021 Vol.16 Issue 1, pp.6-9

Document Type:

Article

Publication Date:

4/2021

Document Language:

English

Document ID (Org No.):

246046

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2021.93880

Descriptors:

WEALTH

ECONOMISTS

ECONOMIC DEVELOPMENT

BUSINESS ORGANIZATION

Issues

Article Details

The Pareto Principle : Applying the 80/20 Rule to Your Business

Authors: Abyad , Abdulrazak

Publisher: medi+WORLD International

Main Topics: Economics and Finance

Journal: Middle East Journal of Business 2021 Vol.16 Issue 1, pp.6-9

Document Type: Article

Publication Date: 4/2021

Document Language: English

Document ID (Org No.): 246046

Frequency: Quarterly

eISSN: 18348769

pISSN: 18348777

DOI: 10.5742/MEJB.2021.93880

Descriptors:

WEALTH

ECONOMISTS

ECONOMIC DEVELOPMENT

BUSINESS ORGANIZATION

Issues

Authors:

Abyad , Abdulrazak

Publisher:

medi+WORLD International

Main Topics:

Economics and Finance

Journal:

Middle East Journal of Business 2021 Vol.16 Issue 1, pp.6-9

Document Type:

Article

Publication Date:

4/2021

Document Language:

English

Document ID (Org No.):

246046

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2021.93880