The value of the Pareto Principle in management is reminding us to stay focused on the -------- that matters
Answer & explanation
Correct answer: option 1
The inventory control technique known as ABC analysis builds on Pareto's Principle. In ABC
analysis, a company reviews its inventory and sorts all SKUs into three categories, called "A" ,
"B" and "C" items. The typical breakdown might look like this: "A" inventory: 20 percent of
SKUs, 80 percent of value. "B" inventory: 30 percent of SKUs, 15 percent of value. "C" inventory: The value of the Pareto Principle in management is in reminding us to stay focused on the 20
percent that matters.