Which analysis uses the 80/20 principle to identify the most significant problems?

• A. Pareto Analysis
• B. Cost-Benefit Analysis
• C. Decision Matrix
• D. Regression Analysis

Answer: (A)

Focusing on the major causes using the 80/20 rule is done with Pareto Analysis. The 80/20 principle suggests that a small number of causes often account for most of the problems. Pareto Analysis collects data on issues and ranks them by impact or frequency, usually visualized in a Pareto chart, so you can see which problems contribute the most. By identifying the vital few problems, you can target improvement efforts where they’ll have the biggest effect.

Cost-Benefit Analysis weighs costs and benefits to decide if an action is worth pursuing, but it isn’t about identifying which problems are most significant. A Decision Matrix compares options across criteria without prioritizing problems by impact. Regression Analysis looks at relationships between variables to predict outcomes, not to highlight the most impactful problems.