4 ms·
Though for any such distribution, there is a point on the curve where the numbers _do_ sum to 100. Surely 0.0001% of customers provide less than 99.9999% of rev
by tomsmeding 3y ago
Though for any such distribution, there is a point on the curve where the numbers _do_ sum to 100. Surely 0.0001% of customers provide less than 99.9999% of revenue, but surely 99.9999% of customers provide more than 0.0001% of revenue. Somewhere in between, assuming continuity(*), there's a ratio that sums to 100.
Not to detract from your point at all — just a curious observation.
* In a way assuming continuity is weird because the underlying numbers are discrete. But in approximation it's fine here if the number of customers is large enough, I'd say.
- FabHK 3y agoNicely put. Another way of seeing this: any Lorenz curve will intersect the “other” diagonal (from top left to bottom right). https://en.m.wikipedia.org/wiki/Lorenz_curve https://en.m.wikipedia.org/wiki/Lorenz_curve
- bmacho 3y agoSo the 80/20 rule is about where it happens, and not about that it happens! I've never realized it before! Okay, you are probably not really interested in the point where they sum up to 100, and you just want the 80% of the profit, whether the distribution gives 80/10 or 80/78 (where all customers give you almost the same profit, revenue and cost). Still a useful rule.