Pareto ChartPareto Chart Also called: Pareto diagram, Pareto analysis Description
its simple role say that : 20 % control 80 % ,, simple isn’t It. That mean , 80 % if problems come from 20 of reasons , 80 % of results come from 20 of work 80 % of cost come from 20 % of spent area … and so on. When to Use - When there are many problems or causes or opportunities and you want to focus on the most important. - When analyzing data about the frequency of problems or causes in a process. How to create Pareto chart:
1-Decide what categories to compare between them.( lets say you want to know what is the most category you spent your money in , lets say Food , Gas , Telephone , Personal care , going out ) 2-Decide what measurement is appropriate. Common measurements are frequency, quantity, cost and time.( in our case , I think it will be money ) 3-Decide what period of time the chart will cover: One Month? One full day? A week? A year ? ( lets say 1 week ) 4-Now in a table , collect the data for each category .( how much you spent in each category over the a week and calculate the sum of the money for each category.( as in table below )
5-Arrange categories in descending way. 6-Construct and label bars for each category. Place the tallest at the far left, then the next tallest to its right and so on. 7-Calculate the percentage for each category: the total for that category divided by the total for all categories. Draw a left vertical axis and label it with Frequency. 8-Calculate and draw cumulative sums:
To that sum add the subtotal for the third category, and place a dot above the third bar for that new sum. Continue the process for all the bars. Connect the dots, starting at the top of the first bar. The last dot should reach 100 percent on the right scale. Download More About Pareto chart
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Its one of Total Quality Management Tool and also usually used as one of six sigma tools in define phase.
Add the subtotals for the first and second categories, and place a dot above the second bar indicating that sum.