Pareto Diagram - bar chart showing major factors contributing to a result. The factors are arranged left to right, from highest frequency, or cost, to the least. The pareto principle states that 20% of the causes lead to 80% of the problems. The pareto diagram is used help focus on the most important factors.
By identifying the factors have have the greatest influence resources can be directed to the areas where there is potential for more return. Often, it is better to use the total cost for all instances of a factor rather than just a count of the number of instances to create the pareto chart: the purpose of the pareto chart is help find the most important factors and often the total cost is more important than the total count.
If the pareto chart doesn't clearly show a few factors contributing to close to 80% think of alternative ways to group or view the data.
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