Pareto Principle (80/20 Rule). Pareto principle, also called the 80/20 Rule means that 80% of the results are due to 20% of the causes. For example ...AdvancedExcelChartsTutorialAdvancedExcelCharts-HomeAdvancedExcel-IntroductionAdvancedExcel-WaterfallChartAdvancedExcel-BandChartAdvancedExcel-GanttChartAdvancedExcel-ThermometerAdvancedExcel-GaugeChartAdvancedExcel-BulletChartAdvancedExcel-FunnelChartAdvancedExcel-WaffleChartAdvancedExcelCharts-HeatMapAdvancedExcel-StepChartBoxandWhiskerChartAdvancedExcelCharts-HistogramAdvancedExcel-ParetoChartAdvancedExcel-OrganizationChartAdvancedExcelChartsResourcesAdvancedExcelCharts-QuickGuideAdvancedExcelCharts-ResourcesAdvancedExcelCharts-DiscussionSelectedReadingUPSCIASExamsNotesDeveloper'sBestPracticesQuestionsandAnswersEffectiveResumeWritingHRInterviewQuestionsComputerGlossaryWhoisWhoAdvancedExcel-ParetoChartAdvertisementsPreviousPageNextPage ParetochartiswidelyusedinStatisticalAnalysisfordecision-making.ItrepresentstheParetoprinciple,alsocalledthe80/20Rule.ParetoPrinciple(80/20Rule)Paretoprinciple,alsocalledthe80/20Rulemeansthat80%oftheresultsaredueto20%ofthecauses.Forexample,80%ofthedefectscanbeattributedtothekey20%ofthecauses.Itisalsotermedasvitalfewandtrivialmany.VilfredoParetoconductedsurveysandobservedthat80%ofincomeinmostofthecountrieswentto20%ofthepopulation.ExamplesofParetoPrinciple(80/20Rule)TheParetoprincipleorthe80/20Rulecanbeappliedtovariousscenarios−80%ofcustomercomplaintsarisefrom20%ofyoursupplies.80%ofscheduledelaysresultfrom20%ofthekeycauses.80%ofacompanyprofitcanbeattributedto20%ofitsproducts.80%ofacompanyrevenuesareproducedby20%oftheemployees.80%ofthesystemproblemsarecausedby20%ofcausesofdefects.WhatisaParetoChart?AParetochartisacombinationofaColumnchartandaLinechart.TheParetochartshowstheColumnsindescendingorderoftheFrequenciesandtheLinedepictsthecumulativetotalsofCategories.AParetochartwillbeasshownbelow−AdvantagesofParetoChartsYoucanuseaParetochartforthefollowing−Toanalyzedataaboutthefrequencyofproblem