How to create a Pareto Chart in Excel
Pareto Chart is the presentation of Pareto principles also known as 80/20 rules, the law of the vital few, or the principle of factor sparsity is used in statistics and quality control. This principle explains 80% of the consequences come from 20% of the causes( the vital few). This 80/20 proportion can be changed in practical life based on the actual requirement. Examples of the Pareto principle is given below:
- 80% money earned by 20% of people.
- top 20% reported bug causes 80% system crash
- 20% of drivers cause 80% of all traffic accidents.
- 80% of the pollution originates from 20% of all factories.
- 20% products of a company generate 80% revenue.