Lean Six Sigma 7 QC Tool (Pareto Chart)

Posted March 13, 2020 by HcgInternational

HCG International is a Leading Training and Consulting Firm. training is provided for Six Sigma Green Belt, Six Sigma Black Belt, Lean Manager, ISO 9001-2015, ITIL V4 Foundation, IATF, IELTS,

A Pareto chart is based on the Pareto Principle postulated by Vilfredo Pareto in the 19th century. Pareto was an economist who claimed that a large percentage of wealth is owned by a relatively small percentage of the population. It went on to define the Pareto Principle which says that 80% of any problem is accounted for by 20% of the factors. Hence, it would be wise to concentrate on the ‘vital few’ rather than the ‘trivial many’. A Pareto Chart is a type of graph which combines both a bar graph and a line graph to represent the factors affecting a variable. While the bars represent the individual factors in decreasing order (of their value), the line represents the cumulative value of the factors. The objective of a Pareto chart is to highlight the most important factors that affect a variable. While the left vertical axis represents the percentage of occurrence (or other unit of measure), the right vertical axis represents the cumulative percentage of total number of occurrence (or other unit’s total). Since the factors are represented in decreasing order, the line graph is always concave.

An area where the Pareto chart and Pareto principle are widely used is inventory control. For example, a retail chain wants to reduce its investment on inventory and storage costs. They would like to maintain the inventory at an optimum level for fast moving goods and only stock minimum levels of slow moving products. A Pareto chart analysis can help them classify the stock into fast moving and slow moving categories, or essential and non-essential categories. Based on the results of this Pareto chart analysis, the managers can focus their resources towards better inventory control and strict management of vital and essential items (and introduce systems like Just In Time inventory for these), and lesser controls for non-essential stock categories. This will help bring down the overall investment on inventory and reduce costs.
-- END ---
Share Facebook Twitter
Print Friendly and PDF DisclaimerReport Abuse
Contact Email [email protected]
Issued By HCG International Pvt Ltd
Phone 09008228303
Business Address # 44 T.P Venugopal CBI Road 2nd cross RT Nagar Bangalore 560032
opp Jude Church
Country India
Categories Education
Tags lean six sigma black belt training in bangalore , lean six sigma certification bangalore , six sigma black belt certification cost , six sigma black belt training in bangalore , six sigma green belt certification in bangalore , six sigma green belt training in bangalore , six sigma training and certification in banaglore , six sigma yellow belt certification cost in bangalore
Last Updated March 13, 2020