Juran developed the concept in the context of quality control, and improvement, naming it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896.
The physicist Victor Yakovenko of the University of Maryland, College Park and AC Silva analyzed income data from the US Internal Revenue Service from 1983 to 2001, and found that the income distribution among the upper class (1–3% of the population) also follows Pareto's principle. An important property of Pareto distributions is that they have a fat tail.
During facility design, this rule often governs the storage area and processing area configurations. Product lines Many video rental shops reported in 1988 that 80% of revenue came from 20% of videotapes.
He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied. A chart that gave the effect a very visible and comprehensible form, the so-called "champagne glass" effect, was contained in the 1992 United Nations Development Program Report, which showed that distribution of global income is very uneven, with the richest 20% of the world's population generating 82.7% of the world's income.
In the US, the top 20% of earners paid roughly 80–90% of Federal income taxes in 2000 and 2006, and again in 2018. In business, many examples of the 80/20 Principle have been validated.
The physicist Victor Yakovenko of the University of Maryland, College Park and AC Silva analyzed income data from the US Internal Revenue Service from 1983 to 2001, and found that the income distribution among the upper class (1–3% of the population) also follows Pareto's principle. An important property of Pareto distributions is that they have a fat tail.
In the US, the top 20% of earners paid roughly 80–90% of Federal income taxes in 2000 and 2006, and again in 2018. In business, many examples of the 80/20 Principle have been validated.
In the US, the top 20% of earners paid roughly 80–90% of Federal income taxes in 2000 and 2006, and again in 2018. In business, many examples of the 80/20 Principle have been validated.
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