3 Replies Latest reply on Jul 25, 2016 8:40 AM by Kevin Morris

    Pareto Chart... not 100% Running Sum Profit

    jon rios

      I have built a Pareto Chart but am confused by the % axis.  I assumed % Running Sum(profit) should Max out at 100% but it extends beyond it.  Here is a screen shot of the setup and calculations and the highest profit which is at 135% of total profits...Where did I go wrong??  (click image to see full screenshot)  thanks

       

        • 1. Re: Pareto Chart... not 100% Running Sum Profit
          Kent Sloan

          Hi Jon,

           

          I can't see from your screen shot but I assume the chart ends at 100%. A Pareto chart using a measure that contains negative values should go over 100% and then at the end come back down to 100%. So roughly talking about the chart shown above if the company had only done business with the top 60% of their customers they would have made (120-100) 20% more in profits than they ended up with because they lost money on the last 40% of customers. The downward section of the profit curve shows the portion of customers that the company made a negative profit from.

           

          Thanks,

          Kent

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          • 2. Re: Pareto Chart... not 100% Running Sum Profit
            jon rios

            not sure I follow up Kent,  from the image it shows the curve clearly goes beyond 100%.  This curve should max out at 100% then start to turn down (tight?)....

             

            the max $ profit shows 124% of total % of profit. (click image to fully open)

            • 3. Re: Pareto Chart... not 100% Running Sum Profit
              Kevin Morris

              From the chart above, it shows that your profit would be about 20% higher if you didn't sell to the 20% of customers that you were selling to at a negative profit.

               

              Pareto would top out at 100% if you had no negative profit numbers. The running sum is going above 100% because you are making more than 100% profit, until you get to the negative numbers, which is negative profit, which bring you back to 100% profit. If you didn't sort by ascending Customer Name (profit) then you would see it more like a stock market ticker, with highs and lows based on the customer. and that would top to 100%.