Pareto's Principal: Pareto & The Analysis of Problems
I think that this is one of the most useful tools in the real life analysis of problems. We'll give just a little background first.
Pareto was an Italian / Swiss economist at the turn of the 19th century. His early work was on equilibrium and he came to try and apply this to incomes and economics. What he is now remembered for is the Pareto Principle which strangely enough seems to cover a vast array of subjects.
Basically the principle is that when you look at any system then 80% of problems are caused by just 20% of reasons. The converse is true that the other 20% of problems are caused by 80% of reasons. It is really a very handy tool in focussing attention on the areas that really matter. When starting on a new project it is best first to do a Pareto analysis so that when you pick a subject to work on the payoff is huge. A typical graph might look something like this:

Pareto graphs are really easy to do. First of all you need to collect data. A good source is to ask everyone to jot down on a sheet any problems that arise even quite minor things. The sheets are collected after say a week and the problems analysed. Quite a nice source of medical problems are the MDU reports which give an analysis of complaints against doctors.
Then put the data on Excel, start the graph section up and go to ‘Custom Types’ then ‘Line – Column’. It is quite straight forward .
There are a number of Web Sites about both Pareto himself and the applications: The University of Melbourne & Robert Luttman & Associates
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