How to Create a Pareto Chart in Minitab 18 - ToughNickel - Money
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How to Create a Pareto Chart in Minitab 18

Joshua has work experience in aerospace/aluminum manufacturing & distribution. He received his BBA in accounting from Kent State University.

A Pareto chart is a combination of a bar graph and line graph. The bars on the graph represent descending ordered individual values for the bars, and a cumulative total is represented by the line graph.

A Pareto chart is a combination of a bar graph and line graph. The bars on the graph represent descending ordered individual values for the bars, and a cumulative total is represented by the line graph.

Why We Use Pareto Charts

Pareto charts are used to categorize data based on the frequency of occurrences of that data. Data frequencies are displayed as a bar chart, but a Pareto can also display a line graph to display the cumulative frequency of occurring events.

The example provided shows different customer dissatisfactions from a customer survey. The customers were only asked for a yes or no answer when questioned. The data is added to Minitab and a Pareto graph is created to show the highest frequency of events. To follow along, download the data used in this tutorial. Also, if you don't have the latest version of Minitab, you can download a trial for the new version.

Add Data to Minitab

When you start up Minitab, the first thing that you need to do is add data. Below is a set of data that I will use to create a basic Pareto chart. The C1.T column to the left is attribute data that describes what quality problems were tracked. The T in the column header is automatically populated when the header senses attribute type data. The C2 column contains the number of dissatisfied customers relating to the issues.

Data can be easily pasted directly into Minitab from Microsoft Excel.

Data can be easily pasted directly into Minitab from Microsoft Excel.

Set Up the Pareto Chart

Now that we have data, we can set up the parameters for our chart. Click on Stat→Quality Tools→Pareto Chart. After you click on the Pareto Chart selection, a window labeled Pareto Chart will appear.

Setting the Pareto chart data is very straightforward.

Setting the Pareto chart data is very straightforward.

Enter Parameter Data

Place your cursor in the "Defects or attribute data in:" text box, then double click on the "C1 Quality Problems" to the left. This will add the appropriate labels to the chart showing the different types of defects in the graph.

Next, place the cursor in the "Frequencies in:" text box, then double click on the "C2 No. of Dissatisfied Customers" to the left. This will show the frequency of the quality problem that has been tracked to the graph.

There is an option to classify the remaining defects into one category. Since we don't have a lot of data for our chart, just click on the "Do not combine" selection. Make sure that this selection is made after the two previous steps are completed.

Other Options

To label the x-axis, y-axis, and the title of the chart, the options button within the Pareto Chart window must be clicked. The x-axis can be labeled "Quality Problems," and the y-axis can be labeled "Number of Dissatisfied Customers." The title of the graph will be "Pareto Chart Displaying Dissatisfied Customers."

Now click OK in the Pareto Chart—Options window, then click OK in the Pareto Chart window.

Labeling the axes and titling the graph.

Labeling the axes and titling the graph.

Pareto Analysis

Now that the chart is created, let's complete an analysis. Notice that the first two attributes account for a little more than 80% of the poor responses from customers. These are the top priorities for the company conducting the survey. The line of thinking traces its origin back to the 80/20 rule. This rule states that 80% of the problems come from 20% of the causes. Once wrong orders and late deliveries are corrected, the Pareto Chart can be revised to set new priorities.

Looking at the chart result, we can see clearly that 80% of the problems are wrong order and late deliveries.

Looking at the chart result, we can see clearly that 80% of the problems are wrong order and late deliveries.

Saving Your Project and Exporting the Graph

To save your file, go to File →Save As, then select the location where you would save the project. There are several ways to export the Pareto Chart from the project:

  • One way is to right-click on the graph and copy the image. Next, the image can be pasted where it needs to go.
  • Another method is to right click on the image and export the image to an Excel or Word document.

References

Boyer, K. & Verma, R. (2010). Operations & supply chain management for the 21st century. Mason, OH: South-Western.

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This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2018 Joshua Crowder