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Pareto

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Definition

The Pareto chart is an ordered bar chart for categorical data where the bars are arranged from highest to lowest frequency. It is used to set priorities among improvement actions, Defects, etc., based on the 80-20 or Pareto priniciple, "20% of the actions produce 80% of the gains" or "80% of customer complaints are produced by 20% of the defects". Using this principle, you can find the vital few categories that account for most of the variation or problems. Focusing on these few Factors leads to the highest gains.

Examples

An airline company has collected data on the reasons for delayed flights. The Pareto chart for these data shows that the causes for at least 75% of the delays are: Passenger and Baggage handling, Aircraft handling, Technical and Equipment failure. Establishing improvement actions to target these problems should therefore drastically reduce the delays.

See Also

Bar Chart

External Links

MoreSteam.com's Toolbox - Pareto Chart (Manufacturing example) - http://www.moresteam.com/toolbox/pareto-chart-manufacturing.cfm OneSixSigma.com Toolbox - Pareto Charts - http://www.onesixsigma.com/tools_resources/tools/pareto.php ASQ's Toolbox - Pareto Chart - http://www.asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html MoreSteam.com's Toolbox - Pareto Chart (Service example) - http://www.moresteam.com/toolbox/pareto-chart-service.cfm