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Relative Frequency Pareto Chart

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A relative frequency pareto chart consists of two graphs – a bar graph showing frequencies and a line graph showing cumulative frequencies (in percentages) over it.

We now explain how to construct a relative frequency pareto chart by means of an example.

Steps to construct a Pareto chart:

  1. Given the frequency table, calculate the cumulative frequencies by adding the current and previous frequencies.
  2. Convert the cumulative frequencies to percentage, by first dividing with the total frequency and then multiplying by 100.
  3. Plot the frequencies using a bar graph.
  4. Plot the cumulative percentages and join them by straight lines.

Example:

Suppose we are given the following data on factors influencing purchase decisions vs the number of customers.

Factors Influencing Purchase DecisionsNumber of Customers
Quality1501
Price1216
Brand1040
Service810
New Products 539
Reviews316
Easy Returns76

Step 1: We first find the cumulative frequencies by adding up the current and previous frequencies.

FactorsFrequencyCumulative Frequency
Quality15011501
Price12161501+1216 = 2717
Brand10401501+1216 + 1040 = 3757
Service8104567
New Products 5395106
Reviews3165422
Easy Returns765498
TOTAL = 5498

Step 2: We convert the cumulative percentage by dividing cumulative frequency by total frequency and multiplying by 100.

FactorsFrequencyCumulative Percentages
Quality1501(1501/5498)*100 = 27.30%
Price1216(2717/5498)*100 = 49.42%
Brand1040(3757/5498)*100 = 68.33%
Service810(4567/5498)*100 = 83.07%
New Products 539(5106/5498)*100 = 92.87%
Reviews316(5422/5498)*100 = 98.62%
Easy Returns76(5498/5498)*100 = 100%
TOTAL = 5498

Step 3: We plot the frequencies using a bar graph and plot the cumulative percentages using a line graph. We obtain the relative frequency pareto chart as shown below.

Pareto Chart Construction Example
Pareto Chart

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