Pareto PrinciplePresented By:Priyanka TSRohit KaulPrasann SaxenaSydenham Institute of Management Studies, Research & Entrepreneurship Education (S.I.M.S.R.E.E), Mumbai

Background

• Suggested by – Joseph M. Juran

• Named after Vilfredo Pareto - Italian Economist

• In 1906, V. Pareto observed that 20% of Italian population owned 80% of Italy’s Wealth

• Also known as 80-20 principle

What it is?

• One of the Seven Quality Control tools

• Statistical technique in decision making for selection of limited tasks which have significant overall impact

Pareto Principle

• 20% of inputs (time, resources, efforts) accounts for 80% of outputs (results, rewards)

• Separates “Vitals few” from “Trivial Many”

Pareto Chart

• A Pareto chart is a series of bars whose heights represent frequency or impact of problems

• The bars are arranged in descending order of heights from left to right

• Bars on left are relatively more important than the bars on the right

• Separates the Vitals from Trivial

Bunking Lectures

Reasons

Not able to wake up in the morning

Depends on mood

Committee work

Lecture is boring

Due to off-summers work

Participating in competitions

Went to native place

Personal Reasons

Lecture is not important academic point of view

Pareto Chart (No. of Students)

0

5

10

15

20

25

30

0

20

40

60

80

100

120

25

15

2 21 1 1 1 1 1

50%

80%84%

88%90%

92%94%

96%98%

100%

No. of Students

Cummulative %

Pareto chart(No. of Lectures)

0

2

4

6

8

10

12

0

20

40

60

80

100

120

36%

70%

77%80%

83%87%

90%93%

97%100%

No. of Lec-tures

Conclusion

• From Above charts it is clear that

20% reasons are responsible for 80% of the students bunking the lectures.

70% lectures are bunked due to 20% of reasons