Pareto Principle (80_20 Rule)

The video explains the Pareto principle, also known as the 80/20 rule, which states that 80% of outcomes result from 20% of efforts. This principle is widely used in organizational practices to link outputs to contributing factors. It is frequently applied in process management, decision-making, and planning. Managers aim to identify the critical 20% of efforts that yield the most significant results and allocate resources accordingly, while minimizing resources on less impactful efforts.

What is another name for the Pareto Principle?

• The 90/10 rule

• The 80/20 rule

• The 70/30 rule

• The 60/40 rule

According to the Pareto Principle, what percentage of output is typically derived from 20% of effort?

• 50%

• 80%

• 60%

• 70%

In organizational practices, how is the Pareto Principle observed?

• By linking output to random factors

• By linking output to contributing factors

• By ignoring contributing factors

• By focusing on all factors equally

Which of the following areas frequently employ the Pareto Principle?

• Marketing strategies

• Product design

• Process management

• Customer service

What do managers aim to identify according to the Pareto Principle?

• The 80% of effort with little effect

• The 20% of effort with the most output

• The 50% of effort with moderate effect

• The 100% of effort with maximum output