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Pareto analysis is a prioritization tool that enables a problem solver or project team to focus on the vital few versus the trivial many.  It’s named after Italian economist Vilfredo Pareto, who observed that 20% of the people held 80% of the wealth.

Commonly known as the 80-20 Rule, Pareto’s findings occur in both nature and business (e.g., 20% of your customers provide 80% of your profit; 20% of your inventory occupies 80% of your floor space; etc.)

Creating a Pareto chart helps determine: 

    • The root causes for a problem that should be addressed first (20% of the causes result in 80% of the effects)
    • The specific elements of a problem that should be addressed first (helps break a problem into bite-sized pieces)

Enjoy the chart! And thank you for joining The Karen Martin Group family of improvement-minded professionals.