How to create a Pareto chart in Excel?

How to create a Pareto chart in Excel?

We, in our daily life, always want to establish parity in everything. But in reality, it does not happen; the input-output relationship never becomes perfect and equal. The primary cause behind this is the Pareto principle. Pareto principle deals with the daily life observation in life that is not always administered symmetrically.

Pareto analysis

Pareto analysis is all about the primary concept of the Pareto principle. The name of economist Vilfredo Pareto names it. This principle opines that 80% of the effects of maximum events result from 20% of the causes.

Some regular life practical examples are related to the Pareto principles:

  • In the economy, around 20% of the wealthiest population dominates about 80% of the world’s revenue.
  • In medicine, 80% of healthcare resources are used by 20% of patients. 
  • In software, 80% of errors and crashes are caused by 20% of bugs. 

A Pareto chart helps to focus on more significant factors in this regard. This article focuses on a brief discussion about Pareto charts in Excel.

Know More:

What is the Pareto chart?

A Pareto chart is also recognized as a Pareto diagram. It is a graph based on the rule of the Pareto principle. In Microsoft Excel, it is a predefined histogram that comprises both vertical bars and a horizontal line. The bars are designed in descending order, constituting the relevant frequency of values, and the line denotes progressive total percentage.

If you visualize the Pareto chart, you will notice that the Pareto graph highlights are significant elements in a data set. The importance of each character is represented in the data set.

If you are intrigued to know how a Pareto diagram can be implemented in Excel, follow the below information.

Procedure to implement the Pareto chart in Excel

It is a very simplified process to implement a Pareto chart in Excel. In Excel 2016, the software itself contains a built-in Pareto chart type. The primary and ultimate need to plot a Pareto graph is to list the items such as issues, factors, categories, and count (refer to as frequency) column-wise. The steps to execute a Pareto chart in Excel are given below.

  • First, select a table. It is enough to choose one cell. Excel 2016 will cover the entire table by default.
  • Select the Insert tab. After that, go to chats group to click upon recommending chats 
  • Hereafter switching to all Charts tab options, you can see the histogram option on the left side. 
  • At that moment, there will appear an option named Pareto thumbnail. Click onto the thumbnail.
  • Now the Pareto chart is almost okay to work on. At the finishing stage, after clicking on Pareto thumbnails, you have to click on OK.

The Pareto chart is now ready to insert into your worksheet. Directly you can change the title of the chart from your perspective. The Excel 2016 built.

The Pareto chart is fully customizable. The color change is available. You can also hide data labels by click on chart elements on the right side. You can also Design a Pareto chart by clicking anywhere at the chart tool in the Pareto chart. An option named design will pop up there. You can do your experiments on thereby implementing different Styles and Colors. 

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