How to use the pareto analysis calculator
- List each cause or item with a count or amount, such as complaints, defects, cost or hours.
- Add as many rows as you need. The page sorts them from the largest to the smallest for you.
- Open More options to change the cutoffs. The default of 80 percent for class A is an example, not a rule.
- Read the vital few, the share they make up and the ranked table with running shares.
Formula
share = item / total x 100
running share = sum of the shares from the top down to this item
class A = items up to and including the first one that brings the running share to the class A cutoff
Items are sorted by size, largest first, with input order kept for ties. Class B runs from the end of class A to the second cutoff, and everything after that is class C.
Five causes of late orders
Items of 50, 30, 10, 5 and 5 total 100. The running shares are 50, 80, 90, 95 and 100 percent. With the cutoffs at 80 and 95 percent, the first two items are class A, the next two are class B and the last is class C.
So 2 of 5 items, which is 40 percent of the items, make up 80 percent of the total. Sorting 5, 50, 5 and 30 gives 50, 30, 5 and 5, with running shares of 55.6, 88.9, 94.4 and 100 percent.
What the vital few means
A Pareto analysis ranks causes by how much they contribute, so you can focus first on the few that matter most. The idea is that a small share of causes often produces a large share of the effect. The 80/20 pattern is a rule of thumb, though, and the real split in your data may be different.
What you measure matters. Counting how often a problem happens shows frequency, while measuring cost or time shows impact, and the ranking can change between the two. Choose the amount that matches the decision you need to make.
Charts and statistics
To chart counts, use the Histogram Maker, group raw values with the Frequency Distribution Calculator, or summarize a set of amounts with the Descriptive Statistics Calculator.
Assumptions and limits
- Amounts cannot be negative, and they must add up to more than zero.
- Ties keep the order you entered them.
- The cutoffs are examples and can be changed.
- Class B must end at or above the class A cutoff.
Frequently asked questions
What is a Pareto analysis?
It ranks causes from largest to smallest and shows the running share, so you can see which few account for most of the total.
Is the 80/20 rule always true?
No. It is a rule of thumb. Your data may show 60/40 or 90/10, and the page lets you change the cutoff to match your judgment.
What do the A, B and C classes mean?
Class A is the vital few, up to the first cutoff. Class B is the next group, up to the second cutoff, and class C is everything left over. This is how ABC analysis of inventory is often done.
Should I use counts or costs?
Use the one that matches your decision. Counts show what happens most often, and costs show what matters most financially. They can rank causes differently.