# Pareto principle

## Pareto principle,

### Definition of Pareto principle:

1. The Pareto Principle, named after esteemed economist Vilfredo Pareto, specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. The Pareto Principle is also known as the Pareto Rule or the 80/20 Rule.

2. The original observation of the Pareto Principle was linked to the relationship between wealth and population. According to what Pareto observed, 80% of the land in Italy was owned by 20% of the population. After surveying a number of other countries, he found the same applied abroad. For the most part, the Pareto Principle is an observation that things in life are not always distributed evenly.

3. Observation that where a large number of factors or agents contribute to a result, the majority (about 80 percent) of the result is due to the contributions of a minority (about 20 percent) of factors or agents. Investigations suggest, for example, that some 80 percent of the sales of a firm are generated by 20 percent of its customers, 80 percent of the inventory value is tied up in 20 percent of the items, 80 percent of problems are caused by 20 percent of reasons. It is however a heuristics principle, and has not been proved as a scientific law. Named after its proposer Vilfredo Federico Damaso Pareto (1848-1923), French-born Italian engineer and a founder of welfare economics. Also called 80/20 principle, Paretos Law, or principle of imbalance.

### How to use Pareto principle in a sentence?

1. The pareto principle was referenced during the meeting so we decided to use that knowledge to examine the efficiency of our business.
2. You may want to study up on the pareto principle and see if there is a way to use it to your companys advantage.
3. The principle, which was derived from the imbalance of land ownership in Italy, is commonly used to illustrate the notion that not things are equal, and the minority owns the majority.
4. The Pareto Principle states that 80% of consequences come from 20% of the causes.
5. It may be a good idea to figure out how you can find a way to make the pareto principle work to your companies advantage.
6. Unlike other principles, the Pareto Principle is merely an observation, not law. Although broadly applied, it does not apply to every scenario.

Meaning of Pareto principle & Pareto principle Definition