Reference lines are typically used for providing a visual comparison against benchmark values. Imagine having a vertical bar chart showing product sales. Further, imagine that these products have a budget value that they are supposed to achieve. Now, if we are able to show a small line which represents the budget thresholds for each of the products, then we can provide a quick visual display to see which products are not exceeding target and which products are exceeding the target. The chart type which is typically used to do a target versus actual comparison is called a bullet chart.
Bullet charts were developed by Stephen Few. A bullet chart is an extension of the regular bar chart, where the length or height of the bar represents the actual values and the horizontal or vertical reference line represents the target.
