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A rule of thumb that states that% of outcomes can be attributed to% of the causes for a given event. In business, the- rule is used to help managers identify problems and determine which operating factors are most important and should receive the most attention based on an efficient use of resources. Resources should be allocated to addressing the input factors have the most effect on a company's final results
Also known as the 'Pareto principle', the "principle of factor sparsity" and the "law of the vital few
