What is Pareto Chart?
A Pareto Chart is a type of chart that is used to analyze data and identify the most significant factors contributing to a particular problem or situation. It is named after Vilfredo Pareto, an Italian economist who observed that 80% of the wealth was owned by 20% of the population. The Pareto Chart follows the same principle, where it visually represents the frequency or impact of different factors in a descending order.
What are the types of Pareto Chart?
There are two main types of Pareto Charts: Simple Pareto Chart and Comparative Pareto Chart.
Simple Pareto Chart: This type of Pareto Chart simply displays the frequency or impact of different factors in a descending order. It helps in identifying the most significant factors and prioritizing them for further analysis or action.
Comparative Pareto Chart: This type of Pareto Chart compares the frequency or impact of different factors across multiple categories or groups. It visually represents the relative importance of each category and helps in identifying the category with the highest impact or frequency.
How to complete Pareto Chart
To complete a Pareto Chart, follow these steps:
01
Identify the problem or situation you want to analyze.
02
Gather relevant data related to the problem or situation.
03
Categorize the data into different factors or categories.
04
Calculate the frequency or impact of each factor.
05
Order the factors in descending order based on their frequency or impact.
06
Plot the ordered factors on the chart, with the tallest bar representing the most significant factor.
07
Analyze the chart to identify the few key factors that contribute to the majority of the problem or situation.
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