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Supply Chain Glossary - P

Supply Chain Glossary - P

Pareto chart

A graphical tool for ranking causes from most significant to least significant. It is based on Pareto's law, which was first defined with respect to quality by J.M. Juran in 1950. The Pareto chart is one of the seven tools of quality.

A concept developed by Vilfredo Pareto, an Italian economist, that states that a small percentage of a group accounts for the largest fraction of the impact, value, etc. In an ABC classification, for example, 20% of the inventory items may constitute 80% of the inventory value. See: ABC classification.

In service operations, the maximum supply volume based on established quotas from previous use for a particular supply item, in a particular department, for a specified time period.


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