Pareto Diagram Definition | Becker

Accounting Dictionary

Pareto Diagram

A Pareto diagram plots data in a hierarchical order, which allows the most significant or most frequent problems to be corrected first; it is a combination of a histogram with a line graph that displays the cumulative occurrence of the problems. The Pareto analysis technique is used primarily to identify and evaluate nonconformities, although it can summarize all types of data. Most quality problems result from a small number of problems, the so-called 80�20 rule (80 percent of the quality problems can be traced to 20 percent of the output). See also control chart and statistical quality control and cause-and-effect diagram.

Related Terms:

Control Chart [BAR]Statistical Quality Control [BAR]Cause-and-Effect Diagram [BAR]Back to Dictionary

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