What is a Pareto chart?

A Pareto chart is a popular way to display information that uses both bars and lines. In these charts, the individual numbers on the graph are represented by the bars, and then the cumulative totals are represented by the lines. This type of chart is especially popular in project management, though they have been used in other areas as well. It is also important to note that it is a very common option in Six Sigma projects.

How to Read a Pareto Chart

On this type of chart the left vertical axis will be used for the frequency of occurrence in most cases, though it can also be used for another key unit of measurement. On the right vertical axis will be the cumulative percentage of a key measurement. This will often be something like the total cost, the number of a unit of measurement, the number of occurrences, or something else.

Why Use a Pareto Chart

Pareto charts are often able to highlight important information about multiple different factors. An example of this would be when tracking quality control issues. The bar graph can identify the exact number of a variety of different potential defects. The line graph will show the total cumulative number or percentage of each item as they are presented. The further to the right the graph progresses, the closer to the total the line graph will be.

Making a Pareto Chart

This type of chart has been popular for many years now, and most spreadsheet software can easily create the charts. This includes Microsoft Excel, Open Office, and many others. Simply entering in the information for each bar graph should automatically apply it to the line graph as it is simply combining the previous numbers. While this chart is great for displaying complex information clearly, it is not very hard to make at all.