What Does the 80/20 Principle Propose

question 130

Multiple Choice

What does the 80/20 principle propose?

• A) Roughly 80 percent of the profit comes from 20 percent of the sales.
• B) Roughly 80 percent of a firm's customers are repeat business.
• C) Roughly 50 percent of a firm's customers purchase 80 percent of the sales volume of the product.
• D) Roughly 20 percent of a firm's customers purchase 80 percent of the sales volume of the product.
• E) Sales are equally divided among heavy,medium,and light users,but they all need slightly different products.

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Definitions:

Workers' Wages

The compensation paid to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Wage Reductions

Actions taken by employers to decrease the amount of money paid to workers, often in response to economic pressure or to increase profitability.

OPEC Price Increases

Refers to occasions when the Organization of Petroleum Exporting Countries decides to raise the price of oil, affecting global economies and energy costs.

Deregulation

The process of removing government restrictions and regulations in industries to improve efficiency and encourage competition.