In: Economics
Find some meaningful data on the web that relates to
percentages and share with your classmates.
For example, review the "80/20 rule" which actually has broad
implications for all of us.
80/20 Rule
80/20 Rule is also known as Pareto Principle. According to this rule, in our day to day life and in most of the areas, 80% of the effects come from 20% of the causes. This is also known as the rule of the vital few, where 20% of the population is responsible for the 80% of the business.
The principle comes from the fact that 80% of the land in Itals is owned by 20% of the population.
Paretos principle is applicable in most of the areas.
Marketing
In the field of business and marketing , the key 20% of the population contributes to 80% of the business,so the organization should focus more on 20% of these key customers.
Distribution of Wealth and Income
As per this principle, the distribution of wealth is quite non-uniform. The major 20% of the richest population contribute to 80% of the total wealth of the economy.
Software Industry
In the software industry, if the major 80% of the bugs are resolved,the 80% cases of system crash and errors can be eliminated.
Thus Paretos principle can be applied everywhere which says that 80% of the major problems are caused by 20% of the reasons and these 20% causes should be focused more in order to get the optimal results.