Teaching:TUW - UE InfoVis WS 2008/09 - Gruppe 10 - Aufgabe 1 - Pareto Chart

Pareto Chart

Definition

A Pareto chart is a histogram in which all bars are sorted in a descendant order. The histogram is often accompanied by a line or curve graph which shows the cumulative value of the particular categories. in the diagram.

Pareto Principal

The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects come from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., "80% of your sales comes from 20% of your clients."

History

Vilfredo Federico Damaso Pareto(July 15, 1848 – August 19, 1923), or Fritz Wilfried Pareto, was an Italian sociologist, economist, and philosopher. He made several important contributions, particularly in the study of income distribution and in the analysis of individuals' choices. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. In 1906, he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy, later generalised by Joseph M. Juran and others into the so-called Pareto principle (also termed the 80-20 rule) and generalised further to the concept of a Pareto distribution.

Bibliography

[Koch et al., 2004] Richard Koch Living the 80/20 Way: Work Less, Worry Less, Succeed More, Enjoy More. Nicholas Brealey Publishing, London 2004. ISBN 1857883314.