A Pareto chart is named after Vilfredo Pareto, an Italian economist who developed the Pareto principle. This principle states that, for many events, roughly 80% of the effects come from 20% of the causes.
About the chart:
The chart is a combination of both bar and line chart, where bars are arranged in descending order whereas the lines in ascending cumulative total. Let’s try and make this chart in Tableau and check if the 80/20 rule applies to our sales data.
Sample Superstore data provided by the Tableau Desktop.
To test if 80% of all sales are caused by 20% of all products.
- Drag Product Name to Column and Sales to Rows.
- Sort the Sum(Sales) by descending order. Change the view of the worksheet to Entire View.
- Press Ctrl and drag Sum(Sales) pill in Rows field right next to itself. This will duplicate the field instantly.
- Click on the second copy of Sum(Sales) on Rows and choose Add Table Calculation. Add a primary table calculation as Running Total. Add a Secondary calculation and choose Percent of Total as the calculation type.
- Click on the second Sum(Sales) pill on Rows and select Dual Axis. I have changed the colour of my Sum(Sales) to purple. Feel free to choose any colour palette.
- Now press Ctrl and drag Product Name to Detail on Marks card for All Values. Click on Product name and change it to Measure (Count Distinct). Now add a table calculation where Primary calculation type is Running total and Secondary is Percent of Total.
- In the final step we will move to the Analytics pane and drag a Reference Line to Sum(sales) table across. Choose a Constant Value and type in 0.8 as the value.
- And we have our Pareto chart ready. Does the 80/20 rule work?. Hover over where the Reference Line meets the Line chart for % of Total Sum(Sales). We see that 80% of all Sales are caused by roughly 20% of all products. ( I have edited the tool-tip: <% of Total Running Sum of SUM(Sales)> of all sales are caused by <% of Total Running Sum of CNTD(Product Name)> of all products).
If you prefer learning through video tutorials, here is a great Tableau training video.