Pareto Principle
The Pareto principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80 percent of the effects come from 20 percent of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80 percent of income in Italy went to 20 percent of the population. It is a common rule of thumb in business; e.g., “80 percent of your sales come from 20 percent of your clients.” Pareto’s law holds that a relatively small number of causes will typically produce a large majority of the problems or defects, where 80 percent of the problems are due to 20 percent of the causes.
