Pareto Analysis
Pareto analysis is used to judge frequency and importance of various items, e.g. faults, errors etc. The Pareto chart is based on ordering various items by their amount. The Pareto 80/20 rule says that 80% of problems is caused by 20% of causes. The rule has been found approximately valid in many practical situations. When expenditures or financial losses are known, the Pareto analysis can be performed on them as well.

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Example:

Task: Classification of mechanical fault causes

Data:
Defect Cause Count Repair Cost
Flange Packing 40 5
Corrosion A 3 60
Corrosion B 35 20
Turn-cock 14 130
Cover B 5 52
Nuts 62 13
Condenser 21 28
Ball bearing H 5 300
Ball bearing M 17 220
Hose 36 40

Pareto Analysis

Output:
Pareto Chart            
             
Task name : Pareto1          
Cost unit : USD          
             
Occurrences            
Causes Count Cost Occurrence ratio Cumulative ratio Cost per occur. Cost ratio
Nuts 62 13 26,05 26,05 806 7,17
Flange Packing 40 5 16,81 42,86 200 1,78
Hose 36 40 15,13 57,98 1440 12,82
Corrosion B 35 20 14,71 72,69 700 6,23
Condenser 21 28 8,82 81,51 588 5,23
Ball bearing M 17 220 7,14 88,66 3740 33,29
Turn-cock 14 130 5,88 94,54 1820 16,2
Ball bearing H 5 300 2,1 96,64 1500 13,35
Cover B 5 52 2,1 98,74 260 2,31
Corrosion A 3 60 1,26 100 180 1,6
Total : 238       11234  
             
Cost            
Causes Count Cost Occurrence ratio Cost per occur. Cost ratio Cumul. cost ratio
Ball bearing M 17 220 7,14 3740 33,29 33,29
Turn-cock 14 130 5,88 1820 16,2 49,49
Ball bearing H 5 300 2,1 1500 13,35 62,84
Hose 36 40 15,13 1440 12,82 75,66
Nuts 62 13 26,05 806 7,17 82,84
Corrosion B 35 20 14,71 700 6,23 89,07
Condenser 21 28 8,82 588 5,23 94,3
Cover B 5 52 2,1 260 2,31 96,62
Flange Packing 40 5 16,81 200 1,78 98,4
Corrosion A 3 60 1,26 180 1,6 100
Total : 238     11234    

Pareto Analysis