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Definition: A Pareto diagram is a histogram, ordered by frequency of occurrence, that shows how many results were generated by type or category of identified cause. Rank ordering is used to guide corrective action—the project team should take action to fix the problems that are causing the greatest number of defects first. Pareto diagrams are conceptually related to Pareto's Law, which holds that a relatively small number of causes will typically produce a large majority of the problems or defects. This is commonly referred to as the 80/20 principle, where 80 percent of the problems are due to 20 percent of the causes.

Acceptance Level:  Generally accepted

Alternative or Related Terms: Pareto's Law; 80/20 principle

Application Areas/Intended Uses: Pareto diagrams are a tool or technique used in quality control.

Chief Advantages: Highlights specific factors that are causing the greatest number of defects or problems in a process