Project Management

Pareto Diagram

last edited by: Latha Thamma reddi on Apr 14, 2023 11:31 PM login/register to edit this page

Pareto Diagram was originally designed by the Italian economist Vilfredo Pareto. It was originally used to represent the distribution of national income.

The theory of the Pareto Diagram is extremely simple, that is, always find only the first three major causes of great influence or 80% of the main causes. You can then concentrate on the resources, and prescribe a solution for these main causes, which can not only save resources but also achieve immediate results.

A Pareto Diagram is a bar graph. The lengths of the bars represent frequency or cost (time or money) and are arranged with the longest bars on the left and the shortest to the right. In this way, the chart visually depicts which situations are more significant.

How to draw Pareto Diagram

  • Firstly, the phenomena, conditions, or causes of the problem are categorized.
  • When collecting data, we should define the scope of classification as clearly as possible, and even descriptively define the scope, to avoid errors in data collection.
  • Decide on the period during which the data is collected. During the data collection period, it is necessary to collect enough quantity to represent the product process.
  • The vertical axis (Y) on the left can be expressed in terms of quantity or amount
  • The vertical axis (Y) on the right is expressed as a percentage from 0% to 100%.
  • Arranged on the horizontal axis (X) from left to right, and from large to small according to the order of the total size of the classification.
  • Draw a histogram and indicate the data.
  • Draw a curve of the cumulative percentage.

last edited by: Latha Thamma reddi on Apr 14, 2023 11:31 PM login/register to edit this page

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