PARETO CHART IN EXCEL, SPSS & R

#PARETO_CHART_IN_EXCEL,_ SPSS_&_R

Pareto chart and pareto principle is explained, chart is constructing using excel, SPSS and R software

Links:

1) UNIVARIATE DESCRIPTIVE STATISTICS PLAYLIST:    • UNI-VARIATE DESCRIPTIVE STATISTICS  

2) HOW TO CONSTRUCT A FREQUENCY DISTRIBUTION TABLE ?    • HOW TO CONSTRUCT A FREQUENCY DISTRIBUTION ...  

3) NOMINAL AND ORDINAL :    • NOMINAL AND ORDINAL WITH EASY EXAMPLES  

Transcript:

Hello everyone!!! How are you? I hope everything is going good and I welcome you all to my YouTube channel SP Daughters as well as the video series on univariate descriptive statistics I'm Gurushiya and right now we are in level 3 section 2 video c and the topic that we're going to discuss about is the pareto principle and the ways in order to construct a pareto chart in excel, SPSS and in R okay without wasting any more time let's go into the topic first of all what is pareto chart a pareto chart is a chart that has both the bar chart and the line chart combined we usually use one second I hope you all remember this flow chart in order to describe the qualitative data we use tables and charts under tables we saw frequency distribution tables in one of our videos there is a link in the description box below if you are not watched you can watch from that link and under charts we have three one is bar other is line and the last one is pareto chart and in this video we are going to discuss about pareto chat and after this we will be discussing on descriptive statistics for quantitative data okay i hope that's clear and uh coming to the pareto chart pareto chart is a chart that combines both bar chart and line chart this is usually uh used in order to find out the defects for example in manufacturing industry or else the quality check team usually uses uh the pareto chart in order to visualize their data because the main theme of um the pareto chart is the pareto principle pareto principle is nothing but the 80 20 rule or the or the 80 20 principle it states that 80 percentage of the effects or 80 percentage of problems are caused by 20 percentage of the factors it can be um set both in positive and negative ways so first let me tell you in the negative way 80 percentage of the problem are caused only by the 20 percentage of factors okay 80 percent of the customer compliance are only because of the 20 percentage factors you can understand that way or else, 80 percentage of the problem in the class in 5b is caused only by 20 percentage of the people who are rough and rigid you can understand that way too okay this is a negative side it can also be looked in a positive manner 20 percentage of the effort you put in a work gives you 80 percentage of the result um let's let's take the previous example itself uh the 80 percentage of problems are caused by 20 percent of the factors right so if we focus on only that 20 percentage factors our 80 percentage problem will be solved that is when we devote our time in that 20 percentage factors we will get eighty percentage of success okay actually this is not an uh how to say an universal law that is um it must be 80 20 20 80. it's not like that it can be 70 30 90 10 99 1 also okay but this is the basic concept behind it and this concept was developed by Vilfred Pareto in 1897 and he was an Italian economist he told that in Itally eighty percentage of the wealth was occupied by twenty percent of the rich people and twenty percentage of the wealth is spread around eighty percentage of the population of the country from this he developed the concept and and he found that there exists a principle called 80 20. okay that's all for the background and now let's uh see how to put a pareto chart in excel, spss and in R first initially excel and in excel this data set tells us that the total issues reported in the last six months in a five-star hotel okay the issues are registering delays room service staff courtesy minibar and like that count is the occurrence of the issue number of times the issue has occurred or noticed or complained or reported okay and in order to construct a pareto chart we need uh something called a relative cumulative frequency as I said in the beginning of the video we put bar as well as line chart in the pareto chart and the bar chart represents the count the absolute frequency that is the category or the issue and absolute frequency will be denoted in the bars okay and the line chart represents the issue and the relative cumulative frequency. Why relative cumulative frequency? you will understand it when we apply um this one for example I'm going to find out the relative frequency and before doing this I'm going to sort the frequency column in order to do that I'm going to select the frequency column in the home tab I'm going to select sort and under that largest to smallest the reason why I'm choosing the largest to smallest option or the descending order option is because I want the majorly affected uh factors in the first i