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A Pareto Chart Is Used For

A Pareto chart is a type of bar graph used to display problems or conditions ranked by importance and frequency. It allows users to focus on critical issues, prioritize problem solving, analyze data by different groupings, and analyze the impact of changes. To construct a Pareto chart, categories of problems are determined and data on frequency and percentages is collected. The chart is then created with bars in descending order of frequency on the left axis and a line showing cumulative percentages on the right axis. This visualizes the most important issues to address.

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Rahul Verma
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39 views2 pages

A Pareto Chart Is Used For

A Pareto chart is a type of bar graph used to display problems or conditions ranked by importance and frequency. It allows users to focus on critical issues, prioritize problem solving, analyze data by different groupings, and analyze the impact of changes. To construct a Pareto chart, categories of problems are determined and data on frequency and percentages is collected. The chart is then created with bars in descending order of frequency on the left axis and a line showing cumulative percentages on the right axis. This visualizes the most important issues to address.

Uploaded by

Rahul Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PARETO CHART

A Pareto Chart is a special form of a bar graph and is used to display the relative
importance of problems or conditions.

A PARETO CHART IS USED FOR:

1. Focusing on critical issues by ranking them in terms of importance and frequency (example:
Which course causes the most difficulty for students?; which problem with Product X is most
significant to our customers?)
2. Prioritizing problems or causes to efficiently initiate problem solving (example: Which discipline
problems should be tackled first? or, What is the most frequent complaint by parents regarding the
school?; solution of what production problem will improve quality most?)
3. Analyzing problems or causes by different groupings of data (e.g., by program, by teacher, by
school building; by machine, by team)
4. Analyzing the before and after impact of changes made in a process (example: What is the most
common complaint of parents before and after the new principal was hired?; has the initiation of a
quality improvement program reduced the number of defectives?)

STEPS IN CONSTRUCTING A PARETO CHART WITH STEP-BY-


STEP EXAMPLE:

1. Determine the categories of problems or causes to be compared. Begin by organizing the problems
or causes into a narrowed down list of categories (usually 8 or less).
2. Select a Standard Unit of Measurement and the Time Period to be studied. It could be a measure
of how often something occurs (defects, errors, tardies, cost overruns, etc.); frequencies of reasons
cited in surveys as the cause of a certain problem; or a specific measurement of volume or size.
The time period to be studied should be a reasonable length of time to collect the data.
3. Collect and Summarize the Data. Create a three-column table with the headings of "error or
problem category", "frequency", and "percent of total". In the "error or problem category" column
list the categories of problems or causes previously identified. In the "frequency" column write in
the totals for each of the categories over the designated period of time. In the "percent of total"
column, divide each number in the "frequency" column by the total number of measurements. This
will provide the percentage of the total.

Error Category Frequency Percent of Total


Punctuation 22 44%
Grammar 15 30%
Spelling 10 20%
Typing 3 6%
TOTAL 50 100%

4. Create the framework for the horizontal and vertical axes of the Pareto Chart. The horizontal axis
will be the categories of problems or causes in descending order with the most frequently
occurring category on the far left (or at the beginning of the horizontal line). There will be two
vertical axes-one on the far left and one on the far right. The vertical axis on the far left point will
indicate the frequency for each of the categories. Scale it so the value at the top of the axis is
slightly higher than the highest frequency number. The vertical axis on the far right will represent
the percentage scale and should be scaled so that the point for the number of occurrences on the
left matches with the corresponding percentage on the right.

5. Plot the bars on the Pareto Chart. Using a bar graph format, draw the corresponding bars in
decreasing height from left to right using the frequency scale on the left vertical axis. To plot the
cumulative percentage line, place a dot above each bar at a height corresponding to the scale on
the right vertical axis. Then connect these dots from left to right, ending with the 100% point at

the top of the right vertical axis.


6. Interpret the Pareto Chart. Use common sense-just because a certain problem occurs most often
doesn't necessarily mean it demands your greatest attention. Investigate all angles to help solve the
problems-What makes the biggest difference? What will it cost to correct the problems? What will
it cost if we don't correct this problem?

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