How to Make Pareto Chart in Excel?

A Pareto chart is a useful tool for visualizing data and making decisions. This chart is commonly used in business to identify the most important factors in a situation and prioritize them for action. It is an effective way to analyze data and make decisions that are based on facts. In this article, we will discuss how to make a Pareto chart in Excel. We will walk you through each step of the process, from downloading the template to creating the chart. By the end of this article, you’ll be able to create a Pareto chart in Excel with ease.

Creating a Pareto Chart in Excel:

Open a Microsoft Excel spreadsheet.
Enter the data for which you want to create a Pareto chart.
Select the data, including the labels.
Go to the “Insert” tab on the Ribbon.
Click on the “Column” button, and then click on the “2-D Column” option.
Select the “Clustered Column” option.
Go to the “Design” tab, and click on “Select Data” to open the Select Data Source dialog box.
Click on the “Edit” button to open the “Edit Series” dialog box.
Check the box next to “Secondary Axis” and click “Close” to close the “Edit Series” dialog box.
Go to the “Design” tab and click on “Change Chart Type.”
Under “Change Chart Type,” select the “Combo” tab.
Choose the line chart type for the secondary axis.
Click “OK” to close the “Change Chart Type” dialog box.

What is a Pareto Chart and How to Make One in Excel

A Pareto chart is an effective tool used to analyze and display data in a graphical format. It is named after the Italian economist Vilfredo Pareto, who developed the concept of the 80/20 rule, which states that roughly 80 percent of the effects come from 20 percent of the causes. A Pareto chart is a bar graph that is ordered from most to least common and shows the relative importance of categories of data. The chart is used to identify the most important factors in a given data set, and can be easily created in Microsoft Excel.

Step 1: Enter Your Data

The first step to creating a Pareto chart in Excel is to enter the data into a spreadsheet. The data should be organized in two columns; one for the categories and one for the corresponding numerical values. Once the data is entered, create a bar graph of the data by clicking the Insert tab and then the “Bar Chart” button.

Step 2: Rearrange the Chart

Once the bar chart is inserted, click the Design tab, and then select the “Switch Row/Column” button. This will rearrange the chart so that the categories are listed on the left-hand side of the chart and the numerical values are listed on the right-hand side.

Step 3: Create the Pareto Chart

Next, click the “Change Chart Type” button under the Design tab and select “Line with Markers.” This will create a line graph of the data.

Step 4: Edit the Chart

To make the chart look more like a Pareto chart, click on the “Format Selection” button under the Design tab. Under the Fill & Line tab, select the “Fill” drop-down menu. Then, select “No Fill” and click “OK.” This will remove the area between the line and the x-axis.

Step 5: Add the Cumulative Percentage

Finally, to show the cumulative percentage of each category, click the “Add Data Labels” button under the Design tab. This will add labels to the line graph that display the cumulative percentage of each category.

Formatting the Pareto Chart

Step 1: Adjust the Axis

The next step is to adjust the scale of the chart. To do this, click the “Format Axis” button under the Design tab. Under the Axis Options tab, select the “Fixed” option and enter the desired range. This will set the scale of the chart to the desired range.

Step 2: Add a Secondary Axis

Next, click the “Add Chart Element” button under the Design tab, and select “Axis” and then “Secondary Axis.” This will add a secondary y-axis to the chart.

Step 3: Format the Secondary Axis

To format the secondary axis, click the “Format Axis” button under the Design tab. Under the Axis Options tab, select the “Fixed” option and enter the desired range. This will set the scale of the secondary axis to the desired range.

Adding Finishing Touches

Step 1: Add Titles

The next step is to add titles to the chart. To do this, click the “Add Chart Element” button under the Design tab and select “Titles” and then “Primary Horizontal” and “Primary Vertical.” This will add titles to the x- and y-axis of the chart.

Step 2: Format the Chart

Finally, click the “Format Chart Area” button under the Design tab and select the “Fill” drop-down menu. Then, select “No Fill” and click “OK.” This will remove the background color from the chart.

Conclusion

Creating a Pareto chart in Excel is a straightforward process that requires only a few simple steps. By following the steps outlined in this article, you can easily create a Pareto chart and use it to analyze and display data in a graphical format.

Related Faq

Q1. What is a Pareto Chart?

A Pareto Chart is a type of chart that combines both a column chart and a line graph. It is used to display the relative importance of different factors that contribute to a particular problem or situation. It is named after the Italian economist Vilfredo Pareto, who first developed the concept in the early 1900s. The chart is based on the Pareto Principle, which states that 80% of the effects come from 20% of the causes. A Pareto Chart can be used to identify and analyze the most important factors in any given situation.

Q2. How do I create a Pareto Chart in Excel?

Creating a Pareto Chart in Excel is a straightforward process. First, organize your data into a table with a column for categories and a column for values. Then, select the data, choose Insert > Charts > Pareto, and the chart will appear. You can then customize the chart by adding titles, labels, colors, and other features.

Q3. What are the benefits of using a Pareto Chart?

The primary benefit of using a Pareto Chart is that it can help to quickly identify the most important factors in any given situation. By visually displaying the relative importance of different factors, it can be easier to prioritize resources and focus on the most significant issues. It can also be used to identify trends, track progress, and prioritize tasks.

Q4. What types of data can be used in a Pareto Chart?

A Pareto Chart can be used to display a variety of data types. These can include numerical data such as costs or sales figures, as well as categorical data such as customer complaints or employee performance. The data can be presented in either absolute or relative terms.

Q5. How do I interpret a Pareto Chart?

Interpreting a Pareto Chart is relatively easy. The chart shows the relative importance of different factors, with the largest factors at the top and the smallest at the bottom. The chart also shows the cumulative total, so it is easy to identify the most important factors and how much they contribute to the overall problem or situation.

Q6. Are there any drawbacks to using a Pareto Chart?

The primary drawback of using a Pareto Chart is that it can be difficult to identify the exact cause of the problem or situation. While it can identify the most important factors, it may not be able to pinpoint the root cause of the problem. In addition, some data types are better suited to other types of charts, such as bar or line graphs.

How to Create A Pareto Chart Like A Pro in Excel | Pareto Principle Example

The Pareto chart is a simple and powerful tool for making data-driven decisions. It is a great way to visualize data and quickly spot trends that can be used to improve processes and maximize results. With the help of Excel, creating a Pareto chart is easy and straightforward. By following the steps outlined in this article, you can create a Pareto chart in no time and use it to your advantage.