Skip to main content
Announcements
Have questions about Qlik Connect? Join us live on April 10th, at 11 AM ET: SIGN UP NOW
hic
Former Employee
Former Employee

“Which products contribute to the first 80% of our turnover?”

This type of question is common in all types of business intelligence. I say “type of question” since it appears in many different forms: Sometimes it concerns products, but it can just as well concern customers, suppliers or sales people. It can really be any dimension. Further, here the question was about turnover, but it can just as well be number of support cases, or number of defect deliveries, etc. It can in principle be any additive measure.

 

It is called Pareto analysis. Sometimes also known as 80/20 analysis or ABC analysis.

 

The logic is that you first sort the products according to size, then accumulate the numbers, and finally calculate the accumulated measure as a percentage of the total. The products contributing to the first 80% are your best products; your “A” products. The next 10% are your “B” products, and the last 10% are your “C” products.

 

Pareto chart.png

 

And here’s how you do it in QlikView:

 

  1. Create a pivot table and choose your dimension and your basic measure. In my example, I use Product and Sum(Sales).

  2. Sort the chart descending by using the measure Sum(Sales) as sort expression. It is not enough just to check “Sort by Y-value”.

  3. Add a second expression to calculate the accumulated sales value:
         RangeSum(Above(Sum(Sales), 0, RowNo()))
    Call this expression Accumulated Sales. The Above() function will return an array of values – all above values in the chart – and the RangeSum() function will sum these numbers.

  4. Create a third expression from the previous one; one that calculates the accumulated sales in percent:
         RangeSum(Above(Sum(Sales), 0, RowNo())) / Sum(total Sales)
    Format it as a percentage and call it Inclusive Percentage.

  5. Create a fourth expression from the previous one; one that calculates the accumulated sales in percent, but this time excluding the current row:
          RangeSum(Above(Sum(Sales), 1, RowNo())) / Sum(total Sales)
    Format it as a percentage and call it Exclusive Percentage.

  6. Create a fifth expression for the ABC classification:
          If([Exclusive Percentage] <= 0.8, 'A', If([Exclusive Percentage] <= 0.9, 'B', 'C'))
    Call this expression Pareto Class. The reason why the Exclusive Percentage is used, is that the classification should be determined by the lower bound of a product’s segment, not the upper.

  7. Create a conditional background color, e.g.
          If([Pareto Class] = 'C', LightRed(), If([Pareto Class] = 'B', Yellow()))

 

You should now have a table similar to the following. In it you can clearly see the classification of different products.

 

Table.png

 

In this table, there are five different expressions that you can use for Pareto analysis. The graph in the beginning of this post uses Sales and Inclusive Percentage for the bars and the line, respectively; and Pareto Class for the coloring of the bars.

 

Further, you may want to combine the Pareto Class and the Exclusive Percentage into one expression:

 

     Pareto Class =
         If(RangeSum(Above(Sum(Sales),1,RowNo())) / Sum(total Sales) <= 0.8, 'A',
         If(RangeSum(Above(Sum(Sales),1,RowNo())) / Sum(total Sales) <= 0.9, 'B', 'C'))

 

Good luck in creating your Pareto chart.

 

HIC

 

Further reading related to this topic:

Recipe for an ABC Analysis

Recipe for a Pareto Analysis – Revisited

128 Comments
hic
Former Employee
Former Employee

With the above method, it is unfortunately not possible to show subtotals or to use the ABC-classification as a dimension.

However, if you use a different definition of the ABC-classification, it's possible. E.g. use the following as calculated dimension:

     =If(Aggr(Rank(total Sum(Sales))< 0.4*Count(distinct total ProductName),ProductName),'A',

       If(Aggr(Rank(total Sum(Sales))< 0.6*Count(distinct total ProductName),ProductName),'B',

       'C'))

I.e. if the product ranks within the best 40% of the products (responsible for most of the turnover), then the product is an 'A' product. And if it is between 40% and 60%, it is a 'B', etc.

With this definition you can use subtotals.

HIC

0 Likes
628 Views
Not applicable

Thanks for the tip, Henric! I will try your suggestion.

I'm currently using a workaround: define three variables and displays them in the input fields(readonly). To recalculate the variables using a macros that is called from the triggers. Сertainly not the best solution.

Yeah, I remember your recommendations "Macros are Bad, but Triggers are Worse", but ...

0 Likes
628 Views
Not applicable

Hi guys,

I was able to create a chart table according to HIC example but i fail to create a combo chart. I can't get reference line to be shown and the right axes shows me 120%. What I'm doing wrong?

abc.png

0 Likes
628 Views
hic
Former Employee
Former Employee

For the reference line, I use the following on the Presentation tab:

Reference line2.png

and for the static (100%) y-axis, I use the following on the Axes tab:

Static percentage.png

HIC

0 Likes
628 Views
Not applicable

Thank you. Just i see that Inclusive percentage might trick the users because sometimes the inclusive percentage point is above the reference line which is 80% so users might get confused why something that is above the 80 percent reference still get an A class

0 Likes
628 Views
dmohanty
Partner - Specialist
Partner - Specialist

Hi Henric,

I was able to show a Pareto Graph for TOP 15 customers and 3 Reference Lines to show Top 5, Top 10 and Top 15 contribution, like this below expressions and graph:

Top 15 Expression:

Sum({<[Cust Name] = {"=Rank(sum(TotalRevenue ))<=15"}>} TotalRevenue )

Accumulated % Expression:

RangeSum(Above(sum({<[Cust Name] = {"=Rank(sum(TotalRevenue ))<=15"}>} TotalRevenue ) , 0, RowNo()))

/

sum(TOTAL TotalRevenue )

Reference Line Expression:

Sum(Aggr(If(Rank(Sum (TotalRevenue))<=5,Sum (TotalRevenue)),[Cust Name])) / Sum (TotalRevenue)


Pareto_Dynamic.jpg

Now my requirement is :Can it be possible to make the Reference Lines Dynamic somehow (Top N)? I mean to say, the User should have the liberty to enter the value of 'N' somewhere and the reference line should display the Top N value? According to the input provided by User the graph would become dynamic.

Could you please suggest some ideas to implement or have any other ideas for better functionality?

Regards!

628 Views
Not applicable

Hi HIC,

I have another tricky question to ask. How can i see different Pareto class records on  different tables. Like i want to see A class in table1, B class in table2 and C class in table3 at once without making any selections and ofcourse i want to see the original table with all pareto class clasifications. Can this be done? I trried many ways but i fail

0 Likes
622 Views
Anonymous
Not applicable

Henric, Thank you for putting this all together.  I am not seeing different results than I would expect.

First Question: I am trying to identify the top 20% and bottom 20% performers but both Victoria and Leslie have the same amount of Saves as those in C and display in the B vs. C.  I would think they would be in the bottom 20% with Dreai, Desiree and William. 

Could you help me understand this.

Pareto.jpg

A Second question:  Is it possible to pull the the minimum of each bucket and place in a variable for use elsewhere?  I need to use the two values for further scoring in the application.

Examples are below. 


AgentName     Saves     Exclusive %     Class

Bob                    22          0.00%               A

Sarah                 19          12%                  A

Craig                  16          37%                  B

Tom                    14          52%                 B

Lynn                    9           78%                 B

George                3           83%                 C

Sherrie                1           96%                 C        


variable $(vSavesA) = 19         as it's the minimum value above 20%

variable $(vSavesB) = 9           as it's the minimum value above 80%


Thank you.

0 Likes
622 Views
hic
Former Employee
Former Employee

Q1: While Victoria, Leslie, Dreai, Desiree and William all have one save only, and thus share the last position, you cannot say that they all belong to the bottom 20%. Together, they are responsible for the range 70.59% - 100%, and someone is responsible for the 71st percent . The internal order is however arbitrary, so we can't tell who has done what. But QlikView will order them, and assign some to group B and some to group C.

It is just as valid to say that they are all responsible for the 71st percent, and thus none of them belong to the worst 20%, as it is to say that they all are in the worst 20%.

If you want the same classification for the entire group, you should use Rank.

Rank(Sum(Saves),1) will assign rank 4 to all of them.

Rank(Sum(Saves),3) will assign rank 8 to all of them.

Q2: No. Not possible. (But it is possible if you instead of Pareto use Rank.)

HIC

0 Likes
622 Views
Not applicable

Hi thanks for this! I have created the initial Pivot successfully.  But I am having difficulty getting the ABC colours represented in the bars of the combo chart.  Can you show an example screenshot of the expression for the background colour please?

Thank you.

0 Likes
622 Views