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Making the Cut
  • Business & Professional Services

Making the Cut

Critical values for Pareto comparisons remove statistical subjectivity

Publication:
Quality Progress
Date:
November 2020
Issue:
Volume 53 Issue 11
Pages:
pp. 38-43
Author(s):
Rudisill, Frank, O’Connor, Jim
Organization(s):
Johnson College of Business and Economics at the University of South Carolina (USC) Upstate, Spartanburg, SC,

Abstract

Pareto analysis, a notion that the vital few of 20% cause roughly 80% of outcomes, has been instrumental in quality improvement by signifying which systems account for a majority of errors. However, a Pareto chart must be made to test for statistical significance. Subjectivity of the data may lead analysts to determine an incorrect vital few. A graph of critical values and p-values aid analysts to show frequencies of occurrences of failure to remove that subjectivity.

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