Show Summary Details

Page of

PRINTED FROM OXFORD REFERENCE ( (c) Copyright Oxford University Press, 2013. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single entry from a reference work in OR for personal use (for details see Privacy Policy and Legal Notice).

date: 01 June 2020

Pareto's Rule (80/20 rule) 

A Dictionary of Business and Management

Jonathan Law

A rule originally applied by the economist Vilfredo Pareto (1848–1923) to income distribution, i.e. 80% of a nation's income is earned by 20% of the population. It can be widely extended as a rule of thumb; for example: 80% of value is locked up in 20% of inventory; 80% of car breakdowns can be fixed by 20% of the spare parts range; 80% of a company's profits will come from 20% of its product range; and 80% of system failures will be caused by 20% of possible causes. The rule can be used as a guide to managers: in deciding how to spend limited funds, priority should be given to the most significant 20% of problems. Once they are eliminated the 80/20 rule will again apply to the remainder. ... ...

Access to the complete content on Oxford Reference requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.