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SAS™ and the 80/20 Principle An Added Bonus to Rapid Decision Support™  Presented by Paul McDonald
RDS--What is it? <ul><li>Rapid Decision Support </li></ul><ul><li>The ability to make useful decisions quickly </li></ul>
The 80/20 Principle <ul><li>Other names </li></ul><ul><ul><li>“ The Rule of the Vital Few” </li></ul></ul><ul><ul><li>“ Th...
80/20 Examples <ul><li>Business </li></ul><ul><ul><li>20% of salespeople make 80% of sales </li></ul></ul><ul><ul><li>20% ...
Key Points of the 80/20 Principle <ul><li>Rarely is the “split” exactly 80/20 </li></ul><ul><ul><li>The concept is that th...
How to Make a Quick 80/20 <ul><li>The RDS Base Macro %PARETO will prepare a basic 80/20 or PARETO chart for analysis </li>...
Submitting PROC PARETO <ul><li>Syntax:  </li></ul><ul><ul><li>PROC PARETO < options >; </li></ul></ul><ul><ul><li>VBAR (va...
SAS/QC Output (High Resolution)
SAS/QC Output (Low Resolution) Pareto Plot of GROUP vs PROFIT „ ƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒ...
The %PARETO Macro For Those Without SAS/QC <ul><li>Syntax:  %pareto (data=, x=, y=, file=) </li></ul><ul><ul><li>data = SA...
Sample SAS Logs 8388  %pareto (data=year, x=group, y=profit, file=pareto) NOTE: SAS/ACC-ODBC License Not Active NOTE: Crea...
%Pareto Output (High Resolution)
%Pareto Output (Low Resolution) Pareto Plot of GROUP vs PROFIT „ ƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒ...
%Pareto Output (Export to Microsoft Excel)
How to Find the Vital Few <ul><li>Draw in several best-fit lines (eyeball method works well) </li></ul><ul><li>Circle the ...
The Pareto Boundaries <ul><li>Data to the left of the first best-fit line intersection point are the vital few </li></ul><...
How to Find the Vital Few Vital Few Trivial Many Your Call
IMPORTANT!!! <ul><li>Not every distribution will fit the model of the vital few </li></ul><ul><li>The analysis is only as ...
Recommended Reading <ul><li>The 80/20 Principle   </li></ul><ul><ul><li>by Richard Koch </li></ul></ul><ul><ul><li>ISBN 0-...
About the Author <ul><ul><li>SPIKEware, Inc. </li></ul></ul><ul><ul><li>115 ½ West Main Street </li></ul></ul><ul><ul><li>...
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SAS and 80/20

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SAS Programming and the 80/20 rule

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SAS and 80/20

  1. 1. SAS™ and the 80/20 Principle An Added Bonus to Rapid Decision Support™ Presented by Paul McDonald
  2. 2. RDS--What is it? <ul><li>Rapid Decision Support </li></ul><ul><li>The ability to make useful decisions quickly </li></ul>
  3. 3. The 80/20 Principle <ul><li>Other names </li></ul><ul><ul><li>“ The Rule of the Vital Few” </li></ul></ul><ul><ul><li>“ The Pareto Principle” </li></ul></ul><ul><ul><li>“ The Peter Principle” </li></ul></ul><ul><li>The principle states that most of your results come from a small proportion of your efforts </li></ul>
  4. 4. 80/20 Examples <ul><li>Business </li></ul><ul><ul><li>20% of salespeople make 80% of sales </li></ul></ul><ul><ul><li>20% of investments make 80% of return </li></ul></ul><ul><li>Sports & Leisure </li></ul><ul><ul><li>20% of at-bats make 80% of the hits </li></ul></ul><ul><ul><li>20% of movies make 80% of profits </li></ul></ul><ul><ul><li>20% of picnickers eat 80% of food </li></ul></ul>
  5. 5. Key Points of the 80/20 Principle <ul><li>Rarely is the “split” exactly 80/20 </li></ul><ul><ul><li>The concept is that there are vital few and trivial many </li></ul></ul><ul><ul><li>80/20 is a rule of thumb to tag the concept </li></ul></ul><ul><li>Most 80/20 decisions are very easy to make in time and efforts </li></ul><ul><li>All 80/20 decisions do not require complex analysis </li></ul>
  6. 6. How to Make a Quick 80/20 <ul><li>The RDS Base Macro %PARETO will prepare a basic 80/20 or PARETO chart for analysis </li></ul><ul><ul><li>SAS/GRAPH package recommended </li></ul></ul><ul><ul><li>Microsoft Excel is also very useful </li></ul></ul><ul><li>PROC PARETO in the SAS/QC Product </li></ul><ul><ul><li>SAS/Graph package recommended </li></ul></ul><ul><ul><li>This is the ideal approach </li></ul></ul>
  7. 7. Submitting PROC PARETO <ul><li>Syntax: </li></ul><ul><ul><li>PROC PARETO < options >; </li></ul></ul><ul><ul><li>VBAR (variables) / < options >;/* required */ </li></ul></ul><ul><ul><li>SYMBOL < n > <options>; /* available with graphic */ </li></ul></ul><ul><ul><li>NOTE <options> 'text'; /* devices only */ </li></ul></ul><ul><ul><li>BY variables; </li></ul></ul><ul><li>Can utilize the SAS/Graph procedures to make high-resolution output or otherwise will create low-resolution output </li></ul><ul><li>More versatile, easier to use, and more efficient than %PARETO macro </li></ul>
  8. 8. SAS/QC Output (High Resolution)
  9. 9. SAS/QC Output (Low Resolution) Pareto Plot of GROUP vs PROFIT „ ƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒƒ† 70 ‰ +++++*‡ 100 ‚ +++++*++++++ ‚ ‚ +++*++++++ ‚ ‚ ++++++ ‚ ‚ +++*++ ‚ ‚ ++++++ ‚ ‚ ++*++ ‚ 60 ‰ ++++ ‚ ‚ ++++ ‚ ‚ ++*+ ‚ ‚ ++++ ‡ 80 ‚ ++++ ‚ ‚ ++*+ ‚ ‚ ++++ ‚ 50 ‰ ++++ ‚ ‚ ++*+ ‚ ‚ ++++ ‚ C ‚ ++++ ‚ u ‚ +*+ ‚ m ‚ +++ ‚ u ‚ +++ ‡ 60 l 40 ‰ +++ ‚ a P ‚ *+ ‚ t e ‚ ++ ‚ i r ‚ + ‚ v c ‚ ++ ‚ e e ‚ + ‚ n ‚ ++ ‚ P t 30 ‰ + ‚ e ‚ ++ ‡ 40 r ‚ * ‚ c ‚ ++ ‚ e ‚ + ‚ n ‚ + ‚ t ‚„ ƒƒƒƒƒƒƒƒƒƒƒ† ++ ‚ 20 ‰‚ ‚ + ‚ ‚‚ ‡ ƒƒƒ+ƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ++ ‚ ‚ ‚‚ ‚ + ‡ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ * ‚ ‚ ‡ 20 ‚‚ ‚ ‚ ‚ ‚ ‚‚ ‚ ‚ ‚ ‚ 10 ‰‚ ‚ ‚ ‚ ‚ ‚‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ…ƒƒƒƒƒƒƒƒƒƒƒ…ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ…ƒƒƒƒƒƒƒƒƒƒƒ† ‚ ‚‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‡ ƒƒƒƒƒƒƒƒƒƒƒ†‚ 0 ‰‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚‡ 0 Š‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹ƒƒƒƒƒ…ƒƒƒƒƒ‹Œ Dav Joe Ann Nic Sam Ben Dan Rob Pat Amy Jea Bob Sales Group
  10. 10. The %PARETO Macro For Those Without SAS/QC <ul><li>Syntax: %pareto (data=, x=, y=, file=) </li></ul><ul><ul><li>data = SAS_dataset </li></ul></ul><ul><ul><li>x = x-axis_variable (character or numeric) </li></ul></ul><ul><ul><li>y = y-axis_variable (numeric) </li></ul></ul><ul><ul><li>file = output_file-specification <optional> </li></ul></ul><ul><li>Data does not have to be summarized by the X value </li></ul>
  11. 11. Sample SAS Logs 8388 %pareto (data=year, x=group, y=profit, file=pareto) NOTE: SAS/ACC-ODBC License Not Active NOTE: Creating Comma-Separated file=PARETO for import into MS-Excel template pareto.xlt. NOTE: SAS/GRAPH License Not Active NOTE: Creating Pareto Plot using Base SAS Procedures NOTE: Using a second SAS Session in background processing to generate report NOTE: SPIKEware SAS macro PARETO used 11.92 seconds. NOTE: (c) 1997 by SPIKEware, Inc. All Rights Reserved. 7386 %pareto (data=year, x=group, y=profit, file=pareto) NOTE: SAS/ACC-ODBC License Active NOTE: Creating MS-Excel Spreadsheet file=PARETO for import into MS-Excel template pareto.xlt. NOTE: Load completed. Examine statistics below. NOTE: Inserted (12) obs into pareto.xls. NOTE: Rejected (0) insert attempts see the log for details. NOTE: SAS/GRAPH License Active NOTE: Creating Pareto Plot using SAS/GRAPH NOTE: SPIKEware SAS macro PARETO used 7.86 seconds. NOTE: (c) 1997 by SPIKEware, Inc. All Rights Reserved. %PARETO macro with BASE SAS procedures and BASE SAS output file. %PARETO macro with SASGRAPH procedures and SASACCESS output file.
  12. 12. %Pareto Output (High Resolution)
  13. 13. %Pareto Output (Low Resolution) Pareto Plot of GROUP vs PROFIT „ ƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒ† ‚ ‚ 22.5 ˆ ˆ ‚ + ‚ 100 ‚ + ‚ ‚ ‚ + ‚ ‚ ‚ ‚ 20.0 ˆ ‚ + ˆ ‚ ‚ ‚ 90 ‚ ‚ + ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 17.5 ˆ ‚ ‚ + ˆ ‚ ‚ ‚ ‚ 80 ‚ ‚ ‚ ‚ C ‚ ‚ ‚ + ‚ u ‚ ‚ ‚ ‚ m 15.0 ˆ ‚ ‚ ‚ ˆ u T ‚ ‚ ‚ ‚ + ‚ 70 l o ‚ ‚ ‚ ‚ ‚ a t ‚ ‚ ‚ ‚ ‚ t a ‚ ‚ ‚ ‚ + ‚ i l 12.5 ˆ ‚ ‚ ‚ ˆ v ‚ ‚ ‚ ‚ ‚ 60 e P ‚ ‚ ‚ ‚ ‚ r ‚ ‚ ‚ +‚ ‚ P o ‚ ‚ ‚ ‚ ‚ e f 10.0 ˆ ‚ ‚ ‚ ˆ r i ‚ ‚ ‚ ‚ ‚ 50 c t ‚ ‚ ‚ ‚ ‚ e s ‚ ‚ ‚ ‚ ‚ n ‚ ‚ ‚ ‚ ‚ ‚ t 7.5 ˆ ‚ ‚ ‚ ‚ ˆ ‚ ‚ +‚ ‚ ‚ ‚ ‚ 40 ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 5.0 ˆ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ˆ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 30 ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 2.5 ˆ +‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ˆ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 20 ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ 0.0 ˆ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ˆ ‚ ‚ ‚ ‚ ‚ ‚ Sales Group ‚ ‚ ‚ ‚ ‚ ‚ ‚ ŠƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒƒƒƒƒƒƒƒƒƒƒˆƒƒŒ Dav Joe Ann Nic Sam Ben Dan Rob Pat Amy Jea Bob Sales Group
  14. 14. %Pareto Output (Export to Microsoft Excel)
  15. 15. How to Find the Vital Few <ul><li>Draw in several best-fit lines (eyeball method works well) </li></ul><ul><li>Circle the points of intersection of the best-fit lines </li></ul><ul><li>Draw vertical lines intersecting each circle to declare the Pareto boundaries </li></ul>
  16. 16. The Pareto Boundaries <ul><li>Data to the left of the first best-fit line intersection point are the vital few </li></ul><ul><li>Data to the right of the last best-fit line intersection point are the trivial many </li></ul><ul><li>Data in between the outer-most best-fit line intersections may be trivial or vital </li></ul>
  17. 17. How to Find the Vital Few Vital Few Trivial Many Your Call
  18. 18. IMPORTANT!!! <ul><li>Not every distribution will fit the model of the vital few </li></ul><ul><li>The analysis is only as accurate as your eyeball </li></ul><ul><li>A radical change in slope of the cumulative frequency line is a good indicator of the vital few model </li></ul>
  19. 19. Recommended Reading <ul><li>The 80/20 Principle </li></ul><ul><ul><li>by Richard Koch </li></ul></ul><ul><ul><li>ISBN 0-385-49170-0 </li></ul></ul>http://www. vstore .com/ cgi -bin/ pagegen / vstorecomputers / spikeware /page.html? vcontext =T&mode= itempage &file=/page/itempagev4/ itempage . spl & prodID =966540 The 80/20 principle -- that 80 percent of results flow from just 20 percent of our efforts -- is one of the great secrets of highly effective people and organizations. Did you know, for example, that 20 percent of customers account for 80 percent of revenues? That 20 percent of our time accounts for 80 percent of the work we accomplish? Now available in paperback, &quot;The 80/20 Principle&quot; shows how we can achieve much more with much less effort, time, and resources, simply by identifying and focusing our efforts on the 20 percent that really counts Available at SPIKEware Books , your favorite bookstore, or your local public library.
  20. 20. About the Author <ul><ul><li>SPIKEware, Inc. </li></ul></ul><ul><ul><li>115 ½ West Main Street </li></ul></ul><ul><ul><li>West Dundee, IL 60118 </li></ul></ul><ul><ul><li>Phone (847) 428-6250 </li></ul></ul><ul><ul><li>Fax (847) 428-6270 </li></ul></ul><ul><ul><li>SPIKEware, Inc. is a consulting firm dedicated to helping other people solve their problems through technology. We specialize in providing solutions for our customers through the SAS Software System. </li></ul></ul><ul><ul><li>http://www. SPIKEware .com/ </li></ul></ul>Paul D. McDonald is the CEO of SPIKEware, Inc. and has been a SAS programmer since 1993. Paul has an A.A. in Electrical Engineering from Cloud County Community College, a B.A. in Physics from Southwestern College, and an M.B.A. in Finance from Keller Graduate School of Management. Paul can be reached by e-mail at [email_address]

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