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The 80/20 Principle Implies That the Majority of All Demand

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The 80/20 principle implies that the majority of all demand is due to a minority of the customers.


Definitions:

Service Level

A measurement used in management to define the standard of performance aimed to be achieved in delivering services or products to customers.

Standard Deviation

A statistical indicator that quantifies the spread of scores or values around the mean in a dataset, illustrating the variability or consistency among the data.

Fresh Gallon

A measurement indicating a gallon of a freshly produced or provided liquid, such as milk or paint.

Safety Stock

Additional inventory kept to reduce the risk of stockouts.

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