This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
To represent the data by a Pareto chart, we first need to sort the expenditure items in descending order, calculate their individual percentages of the total expenditure, and then their cumulative percentages. A Pareto chart is a bar graph that displays categories in descending order of frequency (or expenditure in this case) and also shows the cumulative percentage of the total. Step 1: Sort the items by expenditure in descending order. The total expenditure is given as Rs 2000. | Items | Expenditure (in Rs) | | :-------- | :------------------ | | Food | 800 | | Clothing | 500 | | Education | 400 | | Fuel | 200 | | Misc. | 100 | | Total | 2000 | Step 2: Calculate the percentage of total expenditure for each item and the cumulative percentage. | Items | Expenditure (in Rs) | Percentage of Total Expenditure | Cumulative Percentage | | :-------- | :------------------ | :------------------------------ | :-------------------- | | Food | 800 | (800)/(2000) × 100 = 40\% | 40\% | | Clothing | 500 | (500)/(2000) × 100 = 25\% | 40\% + 25\% = 65\% | | Education | 400 | (400)/(2000) × 100 = 20\% | 65\% + 20\% = 85\% | | Fuel | 200 | (200)/(2000) × 100 = 10\% | 85\% + 10\% = 95\% | | Misc. | 100 | (100)/(2000) × 100 = 5\% | 95\% + 5\% = 100\% | | Total | 2000 | 100% | | Step 3: Construct the Pareto chart. To represent this data as a Pareto chart: • Draw a bar chart with the items on the horizontal axis (x-axis) in the order: Food, Clothing, Education, Fuel, Misc. • The height of each bar will represent the expenditure in Rupees, corresponding to the primary vertical axis (left y-axis), which ranges from 0 to 800 Rs. • Draw a line graph on the same chart representing the cumulative percentage. This line will correspond to a secondary vertical axis (right y-axis), ranging from 0% to 100%. • Plot points for the cumulative percentages at the end of each bar (e.g., 40% above Food, 65% above Clothing, etc.) and connect them with a line. This chart visually highlights that Food, Clothing, and Education account for 85% of the total family expenditure. That's 2 down. 3 left today — send the next one.