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In the 80/20 Pareto concept, only a small portion (20%) of causes are responsible, for a portion (80%) of effects. To gain an understanding of these causes we can use a tool called the Pareto chart. When working on improvement projects following this rule helps us prioritize issues that have the most impact on the outcome i.e looking for the critical Xs. Pareto charts prove useful when identifying issues from a list in an FMEA (Failure Mode and Effects Analysis). It's important to note that for effectiveness we should ensure that these issues don't overlap and that our sample size is adequately large. However, it's essential to acknowledge that the 80/20 rule is a theoretical concept. It may oversimplify business situations and does not apply universally in all contexts. There are instances where this principle may not be applicable as a tool; Projects with more than 20% of important issues Issues with varying levels of importance where not all issues carry the same weightage. Different outcomes are possible ie. effort and impact may differ across issues. Because of the limitation of any one tool, when it comes to improvement projects, it's recommended to assess the best approach to prioritization and not rely solely on the 80/20 rule.

In order to understand this question first we need to understand where this Pareto originated from. A Famous Italian economist named Vilfredo Pareto stated the Pareto principal when he observed that top 20% of population of his country are holding approximately 80% to total wealth (Vital Few, Trivial many). Later this concept was widely used in Quality Control when they observed defects also follow similar pattern as stated by pareto principal. Few problems leading to several parts rejections. Commonly referred as 80/20 rule is just a representation. So cases can be 90/10 and some may follow 70/30. The concept its still the same the small amount of population is holding large amount of wealth. Example See below graph after seeing this you can decide, what should be your first priority to work on. Small amount of problems are causing larger rejections. Pareto chart will give us what should we concentrate more on to get the rejections under control.