What is Pareto analysis and how is it applied in decision-making processes?

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Accepted Answer

Pareto analysis is a technique used to identify the most important factors contributing to a problem or situation.

Pareto analysis is based on the Pareto Principle, also known as the 80/20 rule, which states that roughly 80% of effects come from 20% of causes.
It involves identifying and prioritizing the factors that have the most significant impact on a particular outcome.
By focusing on addressing the most critical factors first, Pareto analysis helps in making more effective decisions and allocating resources efficiently.
For example, in a manufacturing setting, Pareto analysis can be used to identify the most common defects causing production delays, allowing the team to address them proactively.
Pareto analysis can be applied in various fields such as quality management, project management, and process improvement.

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