# Pareto chart (Pareto distribution diagram)

A Pareto chart is a graphical tool used to display the relative proportions of occurrence of different values. In a Pareto chart, values are ordered from left to right in descending order of magnitude, and the cumulative percentage of occurrence is plotted against the value axis.

Pareto charts are often used in quality control to identify the most important factors that contribute to a quality problem. The Pareto principle, also known as the 80/20 rule, states that for many events, roughly 80% of the effects come from 20% of the causes. Therefore, Pareto charts can be used to identify the most important factors that need to be addressed in order to solve a quality problem.

#### How do you draw a Pareto diagram?

A Pareto diagram is a graphical tool used to display the relative proportions of occurrence of different values. In a Pareto diagram, the values are plotted on a vertical axis from largest to smallest, and the cumulative proportions are plotted on a horizontal axis.

The Pareto principle, also known as the 80/20 rule, is a well-known concept in business that states that 80% of the effects come from 20% of the causes. This principle can be applied to many different areas, such as sales, costs, productivity, etc.

To create a Pareto diagram, you will need to collect data on the different values that you want to compare. Once you have the data, you can begin to create the diagram.

There are a few different ways to create a Pareto diagram, but one of the simplest is to use a spreadsheet program like Microsoft Excel.

1. First, create a column for the values that you want to compare. In the example below, we will be comparing the sales of different products.

2. Next, create a column for the cumulative proportions. You can calculate these by adding up the values in the first column.

3. Finally, create a column for the relative proportions. These can be calculated by dividing the values in the first column by the total.

4. Once you have all of your data, you can begin to create the Pareto diagram.

#### How do you read a Pareto chart?

A Pareto chart is a graphical tool used to display the relative proportions of occurrence of different values. The values are typically displayed as bars, with the tallest bar representing the most frequent value.

To read a Pareto chart, start by looking at the tallest bar. This bar represents the most frequent value. The second tallest bar represents the second most frequent value, and so on.

You can also use the Pareto chart to compare the proportions of different values. For example, if you are looking at a Pareto chart of customer complaints, you can compare the proportion of complaints about different products.

##### How do you explain Pareto analysis?

Pareto analysis is a statistical technique in decision making used for analyzing the relative importance of different factors. It is named after the Italian economist Vilfredo Pareto, who developed the concept in his book The Mind and Society.

Pareto analysis is often used to find the most important factors in a situation, and is particularly useful in quality control and business decision-making. For example, if a company is trying to improve its customer service, it might use Pareto analysis to find the most important factors that contribute to customer satisfaction.

Pareto analysis is based on the principle of the 80/20 rule, which states that 80% of the effects come from 20% of the causes. In other words, for many events, roughly 80% of the effects come from 20% of the causes.

Pareto analysis can be used to prioritize actions by identifying the most important factors that need to be addressed first. It is also useful for identifying areas where further investigation is needed.

Pareto analysis is a simple and straightforward tool that can be used to quickly identify the most important factors in a situation. It is important to remember, however, that Pareto analysis is only a tool, and should be used as part of a larger decision-making process.

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