Pareto analysis

Okay kiddo, have you ever heard of the saying "80% of the results come from 20% of the effort"? Well, that's kind of what Pareto analysis is all about.

Let's say you have a bunch of toys in your toy box. And you want to figure out which ones you play with the most. So you start counting and you realize that you only play with 20% of the toys in your box, but those 20% of the toys give you 80% of your enjoyment.

That's the idea behind Pareto analysis! It's a way to look at a big group of things and figure out which ones are the most important or useful. Or, in some cases, which ones are causing the most problems.

For example, a business might use Pareto analysis to figure out which products or customers are making them the most money, and which ones are causing the most headaches. They might find that 80% of their profits come from 20% of their products, or that 80% of customer complaints come from 20% of their customers.

But why is it called "Pareto analysis"? Well, it's named after a guy named Vilfredo Pareto who lived a long time ago. He was an Italian economist who noticed that 80% of the land in Italy was owned by 20% of the population. And he started to see this pattern in lots of other things too! So he came up with the idea of using this pattern to help people make better decisions.

So there you have it, kiddo! Pareto analysis is just a fancy way of figuring out which things are the most important or useful based on some patterns that a smart guy noticed a long time ago.