Pareto Chart (80/20 Rule)
A Pareto chart is a type of bar chart in which the categories are ordered by frequency from highest to lowest, with a cumulative line showing the running total percentage, based on the 80/20 principle.
Explanation
The Pareto chart is one of the seven basic quality tools and is based on the Pareto principle (also known as the 80/20 rule), which states that roughly 80% of problems are caused by 20% of the causes. The chart displays defect categories in descending order of frequency as bars, with a cumulative percentage line overlaid. This makes it easy to identify the vital few causes that account for the majority of problems.\n\nIn quality management, Pareto charts help the project team prioritize their improvement efforts. By focusing on the few causes that create the most defects, the team can achieve the greatest quality improvement with the least effort. For example, if a software project finds that 80% of its bugs come from three modules, those modules should receive priority attention.\n\nPareto analysis is a form of prioritization that helps allocate limited resources effectively. Rather than trying to fix everything at once, the team targets the highest-impact areas first. The cumulative line on the chart helps visualize how much of the total problem would be eliminated by addressing each successive cause category.
Key Points
- •One of the seven basic quality tools
- •Based on the 80/20 rule: 80% of problems come from 20% of causes
- •Bars are arranged in descending order of frequency
- •Helps prioritize improvement efforts on the vital few causes
Exam Tip
The Pareto chart is about prioritization. If the exam asks which defect category to address first, look at the tallest bar on the Pareto chart. The 80/20 rule means focusing on the vital few for maximum impact.
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Quality Management
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