Vilfredo Pareto was an Italian economist, who in 1906 noticed that hat twenty percent of the population owned eighty percent of the wealth.
This has become known as Pareto’s Principle or more descriptively as the 80/20 rule.
In this article from 2002, Microsoft noted that 80 percent of the errors and crashes in Windows and Office – were being caused by 20 percent of the bugs detected.
A Pareto Chart is used to highlight the most important among a (typically large) set of factors, to help improve results, for example with a business - its service, quality or sales etc.
Here is an example, that I produced in Excel using the YouTube video in the Links below:
You basically count whatever you are studying and sort by frequency and show them as a bar chart.
You also overlay their cumulative percentage, so you can identify the 80% mark – which can make for a cut-off point. This allows you to then focus on just those factors causing the 80%.
Pictorial demonstration of 80/20, there is no sound for this one
How to draw a Pareto chart in Excel 2010 by Dr Eugene O’Loughlin: