Cost Analysis With Pareto Chart
9 Cost Analysis with Pareto Chart Excel Templates from www.exceltemplate123.us Cost analysis is an essential part of any business. It helps in identifying areas of high expenditure and finding ways to reduce costs. One effective tool for cost analysis is the Pareto chart. In this article, we will explore what a Pareto chart is and how it can be used for cost analysis purposes. We will also provide a step-by-step guide on creating a Pareto chart and share some tips for interpreting the results. What is a Pareto Chart? A Pareto chart is a graphical tool used to prioritize and analyze data. It is based on the Pareto principle, also known as the 80/20 rule, which states that roughly 80% of the effects come from 20% of the causes. The chart consists of bars and a line graph, with the bars representing the frequency or cost of different categories, and the line graph showing the cumulative percentage. How to Create a Pareto Chart for Cost Analysis? Step 1: Identify the Categories The fir...