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Pareto Analysis is based on the principle discovered by the Italian economist Vilfredo Pareto who investigated the uneven distribution of wealth in Italy and discovered that approximately 80% of the wealth was held by approximately 20% of the people. This is often referred to as the 80/20 rule
This rule applies to many situations, e.g., 80% of your telephone calls come from 20% of your colleagues, 80% of absenteeism comes from 20% of employees, etc. When applied to problem-solving it is often the case that 20% of the causes can contribute 80% of the effect. The 80/20 rule is sometimes referred to as the 'vital few and the trivial many'. Pareto Analysis is a powerful method for ensuring that the main causes of a problem are identified and tackled and Pareto diagrams are excellent for simply and quickly presenting information and to support a need to change a process.
Click here for an example of pareto analysis.