Pareto plot in Excel tutorial
This tutorial will help you draw and interpret a Pareto plot in Excel using the XLSTAT statistical software.
Dataset to generate a Pareto plot
The data are from [Pyzdek Th. (2003), The six sigma Hanbook Revised and expanded, McGraw Hill, New York] and correspond to arrival inspections of peaches of super market during 1 month.
What is a Pareto plot?
A Pareto chart draws its name from an Italian economist, but J. M. Juran is credited with being the first to apply it to industrial problems.
The causes that should be investigated (e. g., nonconforming items) are listed and their respective percentages are calculated. The percentages are then used to construct a bar chart. Pareto chars can be used in various fields from quality control to sales and marketing.
XLSTAT allows you to create basic or advanced Pareto charts (multiple series, sorting options, combining causes, changing colors).
Setting up a a Pareto plot
Once XLSTAT is activated, select the XLSTAT / Statistical Process Control (SPC) / Pareto charts command.
The Pareto charts dialog box appears.
In the General tab, select column A in the Root Causes field and column B in the Frequencies field. Activate the Variable Labels option.
In the Options tab, you can sort or combine causes.
In the Charts tab, select Frequencies to display them on the left axis of the bar chart.
The computations begin once you have clicked on OK.
Interpreting a Pareto plot
The first table displays descriptive statistics for the set of causes such as Frequency and Cumulative %.
Then the Pareto chart is displayed in the form of a bar chart.
We may conclude that 3 defects (rotten, bruised and undersized) represent 95% of all defects. These causes should be followed up during continuous improvement programs.
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