Question

What is the purpose of using a Pareto chart for a given problem? Please elaborate with examples

Answer 1

The purpose of using a Pareto chart for a given problem is to identify the most significant cause related to an issue or problem. It is a bar graph with the data arranged related to various factors in decreasing order. The frequency of the problems can be represented using Pareto chart and the factor with the higher frequencies have more impact on the situation or problem. It can be used to classify the problem and analysing the factors based on their impact for correction or resolving the problem.

Example of using Pareto chart can be analysing the reasons for customer complaints related to an e-commerce business. The chart can be made categorising different factors related to complaints like late delivery, product quality issues, incorrect order or improper packaging etc. The data can be collected for a given period and the frequency related to different categories can be plotted to see the factor responsible for the maximum number of complaints and finding a solution for the same.