Pareto Analysis Definition
Pareto analysis is a technique used for decision-making, prioritization, and resource allocation. It is based on the Pareto principle, which states that 80% of outcomes are typically attributable to 20% of causes.
Pareto analysis can be used in a number of different ways, but the basic idea is to identify the most important factors that are causing a problem or yielding the greatest results, and then focus on those factors in order to get the most bang for your buck.
For example, if you were trying to improve customer satisfaction at your company, you could use Pareto analysis to figure out which 20% of customers are responsible for 80% of the complaints. Once you’ve identified those customers, you can focus your efforts on addressing their concerns in order to make the biggest impact.
Pareto analysis is named after Vilfredo Pareto, an Italian economist who first identified the principle that bears his name. The Pareto principle has been found to hold true in many different situations, and has been applied in fields as diverse as business, medicine, engineering, and software development.
If you’re thinking about using Pareto analysis to improve a process or make decisions at your company, there are a few things you should keep in mind. First, it’s important to have accurate data so that you can identify the most important factors affecting your desired outcome. Second, while Pareto analysis can
