Train collectors Jack McCoy and Sandro Dias have decided to open a store that sells train memorabilia--everything from toy train sets to full-sized railroad signs.After 18 months in business,they have noticed that most of their sales are to the same small group of customers (about 40 people)even though they have records to show their are over 200 active train collectors within a 50-mile radius of their store.Their retailing experience is supportive of the:
A) optimizer principle
B) min-max rule
C) majority fallacy
D) rule of demand
E) 80/20 principle

Question

Quizplus · Accepted Answer

The situation described in the question is an example of the 80/20 principle, also known as the Pareto principle. This principle states that 80% of effects come from 20% of causes, or in this case, 80% of sales come from 20% of customers. In this situation, the same small group of customers is responsible for the majority of the store's sales, even though there are many more potential customers in the area. This suggests that the store should focus on catering to the needs and preferences of this small group of customers in order to maximize sales.

Train Collectors Jack McCoy and Sandro Dias Have Decided to Open