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Pareto Analysis refers to the application of the Pareto Principle as a decision making technique. Pareto’s Priniciple, also known as the 80/20 rule, is most often used within the context of quality control and defect resolution and suggests that a vital few factors or causes are responsible for producing the majority of the problems. 

Pareto Analysis and the Pareto Principle, however, can also be applied more broadly to any number of scenarios that result in roughly an 80/20 distribution.   Often people find that 20% of the overall work effort typically achieves 80% of the work product or goal.

Pareto Analysis plots the distribution of events in a standard Pareto Chart.  The Pareto Chart, named after Vilfredo Pareto, consists of a bar chart and line graph.  The bar chart shows the frequency of the events along the left hand side “y” axis while the event types are plotted in descending order of frequency along the “x” axis.  Then, the cumulative total of the event occurrences are plotted as a line graph and overlaid on top of the bar graph with the cumulative percentage listed along the right hand side “Y” axis.