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Pareto Charts

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1. What is a brief introduction (less than 100 wds) of Pareto Charts?
2. What are the PRO'S of pareto charts?
3. What are the CON'S of pareto charts?

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Hi,

Interesting questions. Let's take a closer look. I also attacked one supporting article.

RESPONSE:

1. What is a brief introduction (less than 100 words) of Pareto Charts?

A Pareto chart is simply a histogram where the categories are sorted from highest to lowest percentage of some sum total. The lengths of the bars represent frequency or cost (time or money), and are arranged with longest bars on the left and the shortest to the right. In this way the chart visually depicts which situations are more significant. (http://www.asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html). A pareto chart is used to graphically summarize and display the relative importance of the differences between groups of data. It can be constructed by segmenting the range of the data into groups (also called segments, bins or categories) (http://www.isixsigma.com/library/content/c010527a.asp).

Thus is is a bar chart used to separate the "vital few" from the "trivial many." These charts are based on the Pareto Principle, which states that 20 percent of the problems have 80 percent of the impact. The 20 percent of the problems are the "vital few" and the remaining problems are the "trivial many." A bar chart used to separate the "vital few" ...

Solution Summary

This solution overviews Pareto Charts, including the pros and cons. Supplemented with one article about Pareto Charts.

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Statistics - Pareto Diagram, Pie Chart

In the summer 2000, a growing number of warranty claims on Firestone tires sold on Ford SUVs prompted Firestone and Ford to issue a major recall. An analysis of warranty-claims data helped identify which models to recall. A breakdown of 2,504 warranty claims based on tire size is given in the following table:

Tire Size Warranty claims
23575R15 2,030
311050R15 137
30950R15 82
23570R16 81
331250R15 58
25570R16 54
others 62

a. Construct a Pareto diagram for the numbers of warranty claims by tire size. What tire size accounts for most of the claims?

b. Construct a pie chart to display the percentage of the total numbers of warranty claims for the 23575R15 tires that come from the ATX model and wilderness model. Interpret the chart.

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