A Pareto chart is a bar graph that lists values in descending order, with the most important data on the left. It is named after Vilfredo Pareto and used in quality assurance to analyze problems and identify the few factors causing them. The 80/20 rule states that 80% of problems can be attributed to 20% of causes.
A Pareto chart is a special type of bar chart or graph that lists values in descending order. Specifically, the most important data starts on the left side of the graph, followed by the least important data on the right. This type of graph is named after Vilfredo Pareto, an Italian sociologist and economist who lived from 1848 to 1923. The point of the Pareto graph is to direct attention to the most significant data being analyzed and it is used frequently in quality assurance.
The left, or vertical, axis of a Pareto chart typically represents the frequency of occurrence of what is being measured. This axis can represent cost or any other important function related to what is being analyzed. There is also a right vertical axis on the opposite side of the Pareto chart which is used to represent the total cumulative percentage of what is being measured. On the horizontal axis between the two vertical axes, the data being analyzed is divided into groups, segments, bins or categories.
A Pareto chart is mainly used to analyze quality control problems. An example of this would be which types of cars are causing the most pollution. On the Pareto chart, the vehicle types with the worst emissions would start to the left and the next worst would be to the right of that. Car types known to be a pollutant would continue to be listed from left to right in descending order.
Basically the Pareto chart is attempting to explain that quality problems can usually be attributed to relatively few factors rather than being evenly distributed among many. Vilfredo Pareto established a principle called the “80/20 rule” which explains it in more specific terms. According to the 80/20 rule, 80% of quality problems can be attributed to 20% of possible causes. In other words, most quality problems in a given situation are caused by a small percentage of factors. In the example of cars, there would be very few types of cars, such as older SUV models, that are causing the most pollution. The Pareto Chart provides insight into what can be done to overcome quality assurance problems in a wide variety of situations.
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