ABSTRACT
A Pareto diagram is used to separate the few significant factors from the trivial many. Identification of the most important sources of problems can help managers to prioritize and allocate resources. The Pareto diagram has proven to be a very quick and easy graphical method to identify when the Pareto principle holds, and to identify the significant factor or factors at play. If categories are defined too broadly, then too few categories are present in the diagram. The greatest weakness of the Pareto diagram is the subjectivity inherent in using categorical data. Brainstorming is a useful tool when developing a list of categories to be used in a Pareto diagram. Once the Pareto diagram is drawn, it is often helpful to use cause-and-effect diagrams to study the cause-and-effect relationships associated with the significant factors. Selecting the appropriate number of categories to include in the diagram is critical.
