The 80-20 rule reflects the idea that ________.
A) 20 percent of the company's profits are generated by the top 80 percent of customers
B) the top 20 percent of customers are highly satisfied and 80 percent of customers will recommend the company to a friend
C) 20 percent of customers are unprofitable, and 80 percent make up a company's profits
D) the top 20 percent of customers often generate 80 percent of the company's profits
E) any new product will be accepted by 20 percent of the customers immediately, but 80 percent of the customers will be up for grabs throughout the product's life cycle

Question

Quizplus · Accepted Answer

The 80-20 rule, also known as the Pareto principle, states that 80% of the effects come from 20% of the causes. In terms of business, this means that 80% of a company's profits are generated by the top 20% of customers. Therefore, the best choice is D, which states that the top 20% of customers often generate 80% of the company's profits.

The 80-20 Rule Reflects the Idea That ________