PARETO OPTIMALITY

The mathematical principles of Pareto Optimality are the foundation upon which CompensationMaster's system is built.

Pareto's principle states that there is an optimal solution that cannot be improved upon without disadvantaging at least one group.

Today, Pareto Optimality is often used to solve complex engineering problems where there are several design objectives, some of which may be competing. The goal is to choose a solution that maximizes benefits subject to the existing constraints.

CompensationMaster is the first company to apply Pareto's principle to determining the optimal commissions to pay sales representatives.

In our case, the constraints are the company's expenses, competitors' commissions, and the desired profit margin.

Our goal is to find a solution that provides the maximum benefit to your sales representatives while ensuring that you retain enough money to pay your bills and make a profit and that you don't lose your representatives to the competition.

Vilfredo Pareto studied mathematics and engineering at the Polytechnic Institute in Turin, and spent the first 23 years of his career as an engineer.

He developed an interest in economics, and in his mid-forties accepted the position of chair of economics at the University of Lausanne in Switzerland.

In addition to his principle of optimality, Pareto is known for the 80/20 rule. He observed that wealth was distributed unequally in his country; twenty percent of the people owned eighty percent of the wealth. This rule has since been extended into many other fields.