ABSTRACT

A Pareto Chart is a two-axis chart that contains both bars and a line graph; the individual values are represented by bars in descending order while the cumulative total is represented by a line. The left vertical axis is the frequency of occurrence. The right vertical axis is the cumulative percentage of the total number of occurrences. Pareto Charts are related to the 80/20 rule, which states that for many events close to 80 percent of the effects are caused by 20 percent of the causes. The Pareto chart highlights the most important factors. In quality control, it could represent the most common sources of defects, the highest occurring type of defect, or the most frequent reasons for customer dissatisfaction. Pareto charts can be generated in software applications like Microsoft Excel, Tableau, specialized statistical software tools, and quality charts generators. Internal auditors can use Pareto Charts to assess the most frequently occurring defects by category.