Pareto Charts

Named after an Italian engineer-economist-sociologist, Vilfredo Pareto, the Pareto principle has become quite well known (often along the lines of the 80:20 law) and, whilst not an actual law of nature, is found to apply in a lot of situations.  Sometimes the effect is quite obvious but, other times, it’s necessary to engage in more detailed data analysis to reach a useful output.

Following the path from Tally Sheet to Bar Chart we can come one step further and create a Pareto Chart.  All we need to do is to sort our bars in decreasing size order and overlay a cumulative total line:

In fact, in a good spreadsheet program, it can need little more than clicking on a different pre-defined graph style (which is what I’ve done here).  If we were in any doubt over the main reason we’re falling behind the boss’ schedule, this should settle it.  How you now present your evidence to the boss is beyond this basic introduction!

[In our example, the conclusion was fairly clear from the original Tally Sheet but that’s not always the case.]

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