Pareto
principle
:
The
80
/
20
rule
80%
of
the
work
is
done
by
20%
of
a
company's
employees
.
Life
is
not
fair
.
We
have
all
heard
this
stated
,
but
Wilfried
Fritz
Pareto
,
an
Italian
engineer
,
economist
,
and
philosopher
,
examined
the
real
life
applications
of
this
statement
.
His
discoveries
are
now
taught
in
accounting
,
economics
,
and
business
classes
throughout
colleges
and
universities
worldwide
.
Although
the
80
/
20
rule
is
not
based
on
exact
numbers
,
it
is
a
general
that
many
businesses
close
to
.
So
,
what
does
it
mean
?
When
Pareto
first
brought
attention
to
this
observation
,
he
used
it
to
determine
income
distribution
,
also
coining
the
term
'elite'
.
In
generalized
terms
,
his
philosophy
stated
that
80%
of
Italy's
land
was
owned
by
20%
of
the
total
population
.
His
claim
mathematical
equations
and
scientific
research
regarding
his
observation
.
If
this
were
true
,
what
else
could
be
affected
?
It
that
many
financial
and
economic
factors
this
general
principle
.
For
example
:
?
80%
of
the
work
is
done
by
20%
of
the
employees
?
80%
of
a
company's
profits
come
from
20%
of
its
customers
?
20%
of
computer
bugs
cause
80%
of
its
?
20%
of
ideas
create
80%
of
the
solutions
to
problems
Now
that
we
know
this
,
how
can
we
apply
it
to
our
own
lives
or
businesses
?
I
have
asked
many
of
my
students
,
colleagues
,
and
friends
how
they
use
Pareto
principle
in
their
daily
lives
.
Each
has
a
very
unique
approach
to
using
it
.
One
of
my
students
is
an
engineer
who
designs
warehouses
for
distributors
,
such
as
Walmart
and
Amazon
.
He
uses
this
principle
based
on
a
20
/
60
/
20
rule
.
Items
which
sell
daily
or
often
(
20%
)
are
put
in
the
best
spot
in
the
warehouses
?
the
front
of
the
shelves
where
they
can
be
reached
easily
.
The
next
60%
of
the
distributor's
inventory
goes
in
the
second
best
areas
of
the
warehouse
?
easily
reachable
,
but
not
in
the
very
front
.
These
would
-
be
items
that
sell
every
week
or
two
weeks
.
The
last
20%
of
their
items
are
placed
in
the
areas
which
are
the
hardest
to
reach
.
These
are
products
which
are
sold
every
two
weeks
to
once
a
month
or
-
items
,
such
as
big
screen
TVs
or
mattresses
.
Another
student
uses
this
method
with
her
calendar
.
She
uses
color
coding
to
design
her
calendar
for
the
week
and
distributes
her
time
into
three
categories
.
Category
A
is
for
anything
that
takes
less
than
30
minutes
.
Category
B
takes
30
minutes
to
an
hour
.
Category
C
is
for
anything
that
takes
more
than
an
hour
.
Since
every
week
is
different
,
sometimes
categories
A
and
C
contribute
to
approximately
30%
of
her
time
(
15%
each
roughly
)
and
category
B
totals
around
70%
.
Sometimes
,
it
is
distributed
closer
to
20
/
60
/
20
,
such
as
the
engineer's
plan
.
This
helps
her
to
her
time
and
be
more
efficient
?
both
personally
and
professionally
.
She
is
able
to
fill
in
time
slots
with
tasks
based
on
the
amount
of
time
it
takes
to
complete
them
if
she
has
free
time
in
her
schedule
.
She
can
make
phone
calls
,
answer
e
-
mails
,
or
even
rearrange
some
meetings
to
make
more
time
for
other
things
,
if
she
needs
to
do
so
.
One
of
the
most
extreme
ways
this
principle
is
used
is
by
a
very
large
corporation
based
in
Miami
.
It
uses
this
principle
for
its
sales
people
.
Its
distribution
is
10
/
80
/
10
,
however
.
The
company
takes
the
top
10%
of
its
sales
team
and
gives
them
everything
for
the
year
?
company
cars
,
company
cell
phones
,
bonuses
,
etc
.
The
next
80%
gets
its
regular
salary
and
commission
?
nothing
extra
.
At
the
end
of
the
year
,
the
bottom
10%
is
and
replaced
.
Some
people
think
this
is
a
bit
extreme
,
but
the
company
sees
it
as
effective
.
So
,
how
can
you
incorporate
Pareto
principle
into
your
daily
routine
?
Let's
check
what
you
can
remember
!
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