Pareto-Analysis is a statistical technique in decision making that is used for the selection of a limited number of tasks that produce significant overall effect. It uses the Pareto Principle (also know as the 80/20 rule) the idea that by doing 20% of the work you can generate 80% of the benefit of doing the whole job.
Why should use Pareto Charts?
Pareto Chart helps us by showing where to focus efforts in order to maximize achievements. Focusing efforts on ‘vital few’ causes is usually a better use of valuable resources.
When Should we use Pareto Charts?
Pareto is very much useful tool when you can count the number of times each defects occurs. Pareto Chart is constructed by segmenting the range of data’s into groups. If you have the count of your data then Pareto is very helpful in Problem-solving decision making.