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What is 80/20 Rule ? Where it is used ?

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تم إضافة السؤال من قبل Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants
تاريخ النشر: 2015/07/16
Gayasuddin Mohammed
من قبل Gayasuddin Mohammed , Advocate , Practicing Law before High Court at Hyderabad

80% of your sales come from20% of your clients.80/20 rule is also called as Pareto principle.

Mohammed Asim Nehal
من قبل Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants

A much-used maxim in business and finance, the80-20 rule is a popularization of the law of diminishing returns in economics. That is, as you put increasing effort, resources or inputs into a given task or production process, you usually tend to receive proportionately less output or returns.

 

Variations of the80-20 Rule: The80-20 rule has many variations. Among them are:

  • The best20% of a firm’s employees may generate80% of its output.
  • The best20% of a firm's customers may produce80% of its revenues or profits.
  • You can be80% right with only20% of the effort needed to be100% correct.

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