Pareto Chart

A Pareto chart is a specific type of histogram, ordered by frequency of occurrence. It shows how many defects were generated by type or category of identified cause (Figure 8-10). Rank ordering is used to focus corrective action. The project team shouid address the causes creating the greatest number of defects first.

Pareto diagrams are conceptually related to Pareto's Law, which hoids that a relatively small number of causes will typicaiiy producc a majority of the problems or dcfccts. This is commonly referred to as the 80/20 principle, where 80% of the problems arc due to 20% of the causes. Pareto diagrams also can be used to summarize ali types of data for 80/20 analyses.

Pareto Diagram of Causes of Late Time Entry

â–¡ Cumulative

Process Documentation

Insufficient Time

Travel

System Failure

Management Direction

30

52

68

71

74

30

22

16

3

Occurrences

Figure 8-10. Pareto Diagram

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Project Management Made Easy

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