What Is Pareto Analysis?

pIn the early 1900s, Italian economist Vilfredo Pareto, made an interesting observation. He noticed that 80% of the land in Italy was owned by just 20% of the people. But what was more interesting, is that this relationship was repeated in other countries throughout Europe.

Over time, he realised that this 80/20 relationship was not limited to land ownership, or limited to human behaviour. He discovered that even nature exhibits the existence of 80/20 relationships – illustrated by the fact that 20% of the pea pods in Pareto’s garden produced 80% of the peas he harvested …

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