Certified Production & Operations Manager (POM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

A Pareto chart is a powerful tool used primarily in quality control and improvement processes. Its primary purpose is to organize and display errors, problems, or defects in a way that helps identify the most significant issues needing attention. This is based on the Pareto Principle, which asserts that a small number of causes often lead to a large portion of the problems, typically quantified as 80/20—where 80% of the effects come from just 20% of the causes.

By visually representing data in descending order of frequency, a Pareto chart enables teams to focus their efforts on resolving the most impactful defects or issues first. This aligns resources efficiently, driving performance improvements and ultimately enhancing quality management efforts. This characteristic makes it a preferred method for identifying and addressing the highest priority areas within a process or operation, leading to more strategic decision-making in quality management strategies.

While tracking financial performance, comparing marketing strategies, and measuring employee productivity are valuable activities in various contexts, they do not align with the specific function and focus of a Pareto chart.