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What is Pareto Analysis?

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Pareto analysis is a prioritization activity based on the Pareto principle that predicts that 20% of your actions will produce 80% of results.


As a basic approach, you can list out all the actions that you can potentially take to reach a goal and then rank them according to impact. The Pareto principle predicts that the top 20% of items on a complete list will produce 80% of the results.


The Pareto principle is popular in a number of fields because it can often be seen in observed data. For example, it is often said that 20% of customers represent 80% of profits.
Overview: Pareto Analysis
Prioritizing actions that have the most impact.
Pareto Principle
The following are a few commonly claimed business rules of thumb that are based on the pareto principle.
20% of bugs cause 80% of errors
20% of products generate 80% of sales
20% of business hours produce 80% of sales
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