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80 - 20 Rule
(also known as Pareto's principle) The common observation that 20% of products or customers often account for 80% of sales. The term is also used to express the view that 20% of the effort on a project often produces 80% of the results.
Implications
Applied in business scenarios where resource optimization is key, such as sales, inventory management, and customer relationship management.
Example
Example: Microsoft found that fixing 20% of the most reported bugs would eliminate 80% of the related issues in a software product.
Related Terms
Different from ABC analysis, which categorizes items explicitly, whereas the 80-20 rule is a general principle applied across various business functions.
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