The Pareto chart is plotted to find the causes that affect the business. For example, 20% of the leads rejected the product for so and so reason. Based on this we can find the areas where the business needs to be improved.
In this blog, we will see how we can achieve Pareto Analysis in Sprinkle Data.
Use Case: We have supermart data. To improve the business, the owner needs to check in which category they are making more profits and also in which category the profits are not up to the mark. So, based on this they can maintain the stock of high-demand products which are giving more profits and also they can check the areas where the profits of other category products are low. To analyze this Pareto chart will be appropriate to make insights.
Below are the steps to create Pareto charts in Sprinkle.
Step 1 → Data Preparation
- Make sure data is available in the warehouse.
- If needed clean the data, transform the data and create a fact table in the transformation layer.
Step 2 → Model Creation
- Create a data model on top of this supermart data.
- Create Business metrics if needed using model expressions or default aggregations.
Step 3 → Report Creation
- Create the report using the model.
- To check the profits contributed by different Sub_Categories, select the Sub_Category dimension and Total Profit measure.
- Sort the Total Profit column in descending order.
- Go to the view mode in the report and find the running total % of the Total Profit column by clicking on the Aggregates.
- Select the Running Total aggregation type and select the Total Profit column under Measure of Aggregation.
- Select the Combo Dual Axis chart. Plot Total Profits on the left axis with a bar chart. And % of Running Total on the right axis with a line chart.
- The % of the Running total is crossing 100% because a few Sub Categories are with negative profits which is nothing but running in losses.
- From the above Pareto Chart, it is clear that 84.5 % of the profits are only from three Sub Categories (Copiers, Phones & Accessories).
- Around four Sub Categories (Tables, Blinders, Bookcases, Machines) are running in losses.
- This is how you can make inferences about the profitability of a store using Pareto Charts.