Western Governors University (WGU) MGMT6010 C207 Data Driven Decision Making Practice Exam

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What is the primary goal of employing a Pareto chart in data analysis?

To summarize all data points equally

To prioritize categories based on their importance

The primary goal of employing a Pareto chart in data analysis is to prioritize categories based on their importance. A Pareto chart is a specific type of bar graph that represents the frequency or impact of problems or causes in a descending order, highlighting the most significant factors contributing to an issue. This visualization is rooted in the Pareto Principle, which suggests that roughly 80% of effects come from 20% of the causes. By using a Pareto chart, decision-makers can quickly identify which categories warrant the most attention and resources, allowing them to focus their efforts on addressing the most critical issues first. This prioritization helps streamline problem-solving efforts and improves overall efficiency in decision-making processes.

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To visually represent temporal data

To identify potential outliers

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