Pareto Diagram

1. Prof (Dr) A Chamaru De Alwis
B.Sc (Bus. Admin) Special Hones (USJ), MSC (Management) USJ , PHD (Management) TBU in Zlin CZ
Professor
Department of Human Resource Management
University of Kelaniya

2. •Suppose your father / mother advice you to
give your suggestions to minimise the Electrify
payment of the month.
Come with your suggestions to overcome this
situation

4. Devise
No of
Devises
Watts per
hour Total Watts
No of
working
hours
Per day
usage
No of
Working
days
Total Watts
per month
32 Inch LED TV 1 40 40 5 200 30 6000
Ceiling Fan 5 65 325 10 3250 30 97500
Desktop Computer 1 100 100 3 300 30 9000
DVD player 1 25 25 2 50 30 1500
Electric kettle 1 1200 1200 1 1200 30 36000
Refrigerator 1 100 100 18 1800 30 54000
Table fan 3 15 45 4 180 30 5400
LED Bulb 8 15 120 12 1440 30 43200
Iron 1 1000 1000 1 1000 30 30000
Total Watts 282600
No of Kwh 282.6
just base on Personal opinion
Base on Watts per hour
Base on total consumption of the devise
Base on scientific Analysis

5. •Pareto Diagram is a
type of Bar Chart is
which various factors
that contribute to a
common results
(Overall effects) is
arrange in order to
magnetite of their
effect.

7. •Pareto Principles states that in any
group of things that contribute to a
common results (Effect) a relatively few
contributors (factors) account for the
majority of the effect

8. 20% of
factors (Few )
80% of the
Results
(Majority)

9. •Pareto Principle
• Originally, the Pareto
Principle referred to
the observation that
80% of Italy’s wealth
belonged to only 20%
of the population.

12. • 20% of the input creates 80% of the result
• 20% of the workers produce 80% of the result
• 20% of the customers create 80% of the revenue
• 20% of the bugs cause 80% of the crashes
• 20% of the features cause 80% of the usage

13. Category Frequency
No Signature 40
Non-legible writing 22
Current Customer 15
No address 9
Other 8
• Prepare an analysis sheet, putting the categories in order and
placing the one with the largest count first.

14. Category Frequency
No Signature 40
Non-legible writing 22
Current Customer 15
No address 9
Other 8
Cumulative
Figure
40
62
77
86
94
Total 94
40
40+ 22=62
62 + 15 =77
40 + 22+ 15+ 9+ 6 = 94
77 + 9 =86
86 + 08 =94

15. Category Frequency
No Signature 40
Non-legible writing 22
Current Customer 15
No address 9
Other 8
Cumulative
Figure
40
62
77
86
94
Total 94
%
42.55
23.40
15.96
9.57
8.51
100
40/94%
22/94%
15/94%
9/94%
8/94%

16. Category Frequency
No Signature 40
Non-legible writing 22
Current Customer 15
No address 9
Other 8
Cumulative
Figure
40
62
77
86
94
Total 94
%
42.55
23.40
15.96
9.57
8.51
100
40/94%
62/94%
77/94%
86/94%
94/94%
Cumulative %
42.55
65.96
81.91
91.49
100.00

17. Category Frequency
No Signature 40
Non-legible writing 22
Current Customer 15
No address 9
Other 8
Cumulative
Figure
40
62
77
86
94
Total 94
%
42.55
23.40
15.96
9.57
8.51
100
Cumulative %
42.55
65.96
81.91
91.49
100.00

18. • Sub Step 1 : Draw a bar chart for Frequency Colum
0
5
10
15
20
25
30
35
40
45
No
Signature
Non-legible
writing
Current
Customer
No address Other
Pareto Chart for Defect typies

19. 0.00
20.00
40.00
60.00
80.00
100.00
120.00
0
5
10
15
20
25
30
35
40
45
No
Signature
Non-legible
writing
Current
Customer
No address Other
Pareto Chart for Defect typies

20. 0.00
20.00
40.00
60.00
80.00
100.00
120.00
0
5
10
15
20
25
30
35
40
45
No Signature Non-legible
writing
Current
Customer
No address Other
Pareto Chart for Defect typies

21. 0.00
20.00
40.00
60.00
80.00
100.00
120.00
0
5
10
15
20
25
30
35
40
45
No Signature Non-legible
writing
Current
Customer
No address Other
Pareto Chart for Defect typies
Vital Few

24. Defect Frequency
A 120
B 80
C 60
D 40
E 40
F 20

26. Cause of accident Accidents Frequency
Excessive speed 24
Improper lane change 6
Mechanical failure 47
Incapable driver 22
Weather conditions 13
Type of mechanical failure Accidents Frequency
Blown tire 32
lost Breck ' 9
Lost steering control 5
Other 1

27. Reason for scrap/rework Frequency
Excess insoluble matter 32
Moisture content high 23
Low melting point 11
Dyestuff contamination 4
Conversion process failure 3
High iron content 2
Phenol content > 1% 1
o Absorption spectrum 1
o Unacceptable Application 1
o Unacceptable Chromatogram 1
Reason for scrap/rework Cost
Dyestuff contamination 160000
Conversion process failure 120000
Low melting point 55000
Excess insoluble matter 20000
Moisture content high 14950
Unacceptable application 10000
Phenol content >1% 9600
High iron content 5000
Unacceptable chromatogram 4500
Absorption. spectrum 950

28. Accident cause
Percentage of all
accidents
Estimated loss of
production
(Millions/
annum)
Handling goods 27 310
Machinery 16 190
Falls from heights >6′ 16 100
Hand tools 7 65
Transport 8 30
Burns (including chemical) 5 15 15
Falling objects 7 20
Striking against objects 9 7
Tripping 3 10
Unspecified 2 3

31. • Pareto analysis is a useful technique where many possible courses
of action are competing for attention.
• • Pareto analysis is a creative way of looking at causes of problems
because it helps stimulate thinking and organize thoughts

32. • A Pareto Chart is a good tool to use when the process you are
investigating produces data that are broken down into categories
and you can count the number of times each category occurs.
0
10
20
30
40
50
Defect 1 Defect 2 Defect 3 Defect 4 Defect 5 Defect 6 Defect 7 Defect 8 Defect 9 Defect 10 Defect 11 Defect 12
FREQUENCY
AXIS TITLE
Defect Types of Product A for the period from 13th March
to 12th April
Defect Type

33. •A Pareto chart is a bar chart that displays the
relative importance of problems in a format
that is very easy to interpret. ...
• A check sheet is a useful tool for collecting
data for Pareto charts.

36. • You recently earned Rest 10,000 and would like to apply it to some
of your outstanding bills.
• Those are
• Home improvement loan balance Rs.1,956
• Visa Rs.2,007 MasterCard Rs.1,983
• Church building fund pledge (monthly installments of Rs.83.33 for two
years)
Rs.2,000
• Balance of car loan Rs.1,971
• School tuition (monthly installments of Rs.169.17 for one year) Rs.2,030

37. Category Amount
payable
School tuition (monthly
installments)
2030
VISA 2007
Church pledge (monthly
installments)
2000
MasterCard 1983
Balance of car loan 1971
Home improvement loan balance 1956

38. 0.00
20.00
40.00
60.00
80.00
100.00
120.00
1900
1920
1940
1960
1980
2000
2020
2040
Amount payable Cumulative % 80% Rule
Vital Few ?

39. • The significant few-trivial many principle does not always hold.
• No matter how many data are categorized, they can be ranked and
made into a Pareto diagram. But sometimes no single bar is
dramatically different from the others, and the Pareto Chart looks
flat or gently sloping.
• To attack the tall bar in that situation is no help. You need to look
for another way to categorize the data.

40. • The Pareto Principle helps you realize that the majority of
results come from a minority of inputs.
• Then you can focus
• 20% of workers contribute 80% of results: Focus on rewarding these
employees.
• 20% of customers contribute 80% of revenue: Focus on satisfying these
customers.
• The examples go on. The point is to realize that you can often focus your
effort on the 20% that makes a difference, instead of the 80% that doesn’t
add much.