Pareto Analysis

Posted in Operations and Supply Chain Terms, Total Reads: 1799
Advertisements

Definition: Pareto Analysis

Pareto analysis is a technique used in decision making based on the Pareto principle which is also known as the 80/20 rule. This technique statistically separates out a limited number of input factors which will have greatest impact on an outcome.

 

Pareto principle says that 80% of a project’s benefit can be achieved by doing only 20 % of the work or in other way 80% of the problems can be traced to 20 % of the causes. Typically it shows that a disproportionate improvement can be achieved by ranking various factors or causes and then working on those 20% which will have the greatest impact.

 

Eg: In project management on can identify the 20% of the risk which can have the greatest impact on the project instead of focusing on all the risks.

Search & Explore : Management Dictionary

Browse the definition and meaning of more terms similar to Pareto Analysis. The Management Dictionary covers over 7000 business concepts from 6 categories.

Advertisements



Share this Page on: