Getting Familiar with Pareto Analysis

Closeup shot over 80/20 Rule words on paper

Introduction

If you are working in an office, an institution or any other department similar to them, the Head of the Department is always the prestigious position. But with all the benefits also comes this gigantic load of problems. Even more if you have just joined as one the host of problems that you have inherited with the post can get a bit out of hand at times. It often becomes hard and confusing as you fail to prioritize the problems. In an ideal situation you would first want to deal with the most important of problems. You also need to check if some of the problems are being caused by a common source of error and thus can be solved by eliminating the common source.

In situations where multiple problems demand your attention there are a bunch of courses of action for you to choose from. Pareto Analysis is a simple method used for prioritizing courses of action with the problems being resolved by them taken under consideration. The changes which would improve the current scenario are identified and accordingly prioritized.

The Pareto Analysis is based on the Pareto principle better known as the “80/20 Rule”. The main idea of the “80/20 Rule” is that dealing with only 20% of your problems produces 80% result. It is also conversely believed that 80% of the problems trace their root back to 20% of causes. The Petro Analysis method tries to identify that 20% of the work solving which would complete 80% of the result which the total amount of work would bring. The Pareto Analysis signifies the lack of symmetry that often appears between work input and result obtained.

This kind of decision making usually finds its use in fields of endeavor, from government policy to individual business decisions.

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