Question

The 80/20 rule is a concept, which suggests:

a. eighty percent of a firm's inventory should be readily available, and twenty percent should be reserved for emergency demand.
b. eighty percent of a firm's first time users will become brand loyal and twenty percent of the firm's first time users will use the product only once.
c. eighty percent of a firm's sales are obtained from twenty percent of its customers.
d. eighty percent of a firm's expenditures are tax deductible and twenty percent are not.
e. eighty percent of a firm's products will ultimately be sold at the original markup price, and twenty percent will not.

Answer 1

The 80/20 rule, also known as the Pareto Principle, indicates that 80 percent of a firm's sales often come from 20 percent of its customers. The correct option is c.

Step-by-step explanation:

The 80/20 rule, often referred to as the Pareto Principle, is a concept in business and economics that suggests a small percentage of causes or efforts usually lead to a majority of the results, outcomes, or rewards. The correct answer to your question is c. eighty percent of a firm's sales are obtained from twenty percent of its customers. This principle is widely observed across various industries and scenarios, implying that a limited set of factors are most influential in driving success.The 80/20 rule, also known as the Pareto Principle, states that eighty percent of a firm's sales are obtained from twenty percent of its customers (c). This means that a small group of customers are responsible for the majority of a company's revenue. This concept can help businesses focus their marketing and sales efforts on their most valuable customers and improve their overall profitability.