(Solved Homework): How do I construct Pareto charts?…

How do I construct Pareto charts?

Expert Answer

Pareto Charts can be created in various softwares like microsoft excel, Tableau ,etc.

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I have chosen to explain making Pareto Charts in excel.

Problem : You have data on your last month spending. You have to decided to reduce your spending by 40%. A pareto analysis can help you address this.

Suppose below given is your spending pattern

Follow the process step wise as mentioned below

Step 1 : Sort your data from largest amount to smallest amount

Step 2: Calculate the sum of all the spendings and find out total spending in the month

Step 3 : Create a cummulative amount column and calculate cummulative amount starting with the first one after sorting

Step 4 : Create a cummulative percentage column.

Cummulative percentage = Cummilative amount / Total amount

This makes you ready with data required to make a pareto chart.

Creating Pareto Chart

Step 1: Select the data and press ALT+F1 to create a chart automatically

Step 2: Right click in the chart area and select “SELECT DATA”. Remove Cummilative amount. Either uncheck it ot select cummulative amount and choose remove option.

Step 3: Highlight the cummulative % on th x- axis. After highlighting, right click and select ” Change Chart Series Type”

Step 4 : Choose a line graph.You now have a bar chart with a flat line graph along the x-axis. In order to get a curve to our Cummulative % line, we need the other vertical axis.

Step 5: Right click on the Cumulative % line and choose Format Data Series. The Format Data Series dialog box appears.Choose Secondary Axis under Series Options then click Close.

Now, your Pareto chart is created.

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