Making the Cut
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 helps differentiate the “vital few” improvement opportunities from the “trivial many” by distinguishing between categories with different frequencies of occurrence. One shortcoming of Pareto analysis is the omission of a test for statistical significance. Many practitioners, therefore, construct a Pareto chart and subjectively identify the vital few categories on which to focus. The authors provide a simple approach to remove the subjectivity from these analyses by identifying the categories that have a statistically significant frequency of occurrence.
Keywords
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