Certified Supply Chain Professional (CSCP) Practice Exam

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Study for the Certified Supply Chain Professional (CSCP) Practice Exam. Prepare with multiple choice questions, each accompanied by hints and explanations. Get ready to ace your exam!

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A Pareto chart is based on which principle?

70/30 Rule
90/10 Rule
80/20 Rule
60/40 Rule

The correct answer is: 80/20 Rule

The correct answer is tied to the concept of the Pareto Principle, which is often expressed as the 80/20 Rule. This principle suggests that, in many situations, roughly 80% of the effects come from 20% of the causes. In the context of a Pareto chart, this means that a small number of factors are responsible for the majority of the problems or results. This chart visually represents the frequency or impact of problems in a descending order, allowing organizations to identify the most significant issues to address first. By focusing on the critical few (the 20%), managers and teams can effectively allocate resources and efforts to create the greatest overall improvement, aligning perfectly with the essence of the Pareto Principle. This principle serves as a powerful tool in quality control and process improvement initiatives in supply chain management and various industries.