![]() ![]() Of particular relevance to Daly’s work are the growth imperative and inequalities that result from using Pareto optimality as a measure of efficiency. Finally in part three I will propose some solutions. Part two explores the philosophies of Vilfredo Pareto, shows that they are entirely consistent with his principle of optimality, demonstrates their relationship to recent economic conditions, and concludes that his views and values have triumphed. In part one of this article I will explore the underlying meaning of Pareto Optimality (aka efficiency), and conclude it is actually a normative criteria masquerading as "value-free". When looked at in depth we find that Pareto optimality is highly charged with underlying normative values, assumptions, and implications. Economic efficiency is defined by the criteria of Pareto optimality as if it were a perfectly objective, value free measure of efficiency. Neo-classical economics (NCE) 1, or mainstream economics, is touted as a positive, “valuefree” science. The case is developed and presented using the case study methodology. In particularly the paper tries to find for which suppliers and which types of material, the purchasing process must be reviewed and even end. ![]() The aim of the paper is to develop several points of view from which the root causes arise and problems can be interpreted. In this case the Pareto principle is adopted to rationalize the purchasing process and ensure better long term sales margins. The firm Mix Metal is a small trader in iron scrap present on the Croatian market since 2004. This paper, in particularly links the Pareto principle postulates to the decision making techniques and proposes different points of view for improving the purchasing process in a particular firm. Separating the vital few from the trivial many, the management staff can improve firm performance. ![]() The principle can be applied to indicate the priority of problem solving and determine the direction of business drivers’ development. Vilfredo Pareto (1848 – 1923) was studying the inequality of welfare distribution in Italy during the nineteenth century and developed a useful tool named „the principle 80:20“, which was later adopted in many fields to explain that a small number of causes can be responsible for a large percentage of effects. ![]()
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