A Pareto chart is a type of chart that contains both bars and a line graph, where individual values are represented in descending order by bars, and the cumulative total is represented by the line.Pareto charts are extremely useful for analysing what problems need attention first because the taller bars on the chart, which represent frequency, clearly illustrate which variables have the greatest cumulative effect on a given system.
The left vertical axis is the frequency of occurrence, but it can alternatively represent cost or another important unit of measure. The right vertical axis is the cumulative percentage of the total number of occurrences, total cost, or total of the particular unit of measure.
The purpose of the Pareto chart is to highlight the most important among a set of factors. In quality control, it often represents the most common sources of defects, the highest occurring type of defect, or the most frequent reasons for customer complaints, and so on.
When to use Pareto chart ?
- When analysing data about the frequency of problems or causes in a process.
- When there are many problems or causes and you want to focus on the most significant.
- When analysing broad causes by looking at their specific components.
- When communicating with others about your data.
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