Business Mathematics

and Statistics

2nd Assignment Report

Procedures of maxima and

minima

Submitted to: M.Bilal Kamran

Submitted by : Umar Ashfaq

M.COM 1 ( ICT Islamabad)

BT590386
Background
A set of quantitative data has many features. One of the goals of statistics is to
describe these features with meaningful values and to provide a summary of the
data without listing every value of the data set. Some of these statistics are quite
basic and almost seem trivial. The maximum and minimum provide good
examples of the type of descriptive statistic that is easy to marginalize. Despite
these two numbers being extremely easy to determine, they make appearances in
the calculation of other descriptive statistics. As we have seen, the definitions of
both of these statistics are very intuitive.

The Minimum
We start by looking more closely at the statistics known as the minimum. This
number is the data value that is less than or equal to all other values in our set of
data. If we were to order all of our data in ascending order, then the minimum
would be the first number in our list. Although the minimum value could be
repeated in our data set, by definition this is a unique number. There cannot be
two minima because one of these values must be less than the other.

The Maximum
Now we turn to the maximum. This number is the data value that is greater than
or equal to all other values in our set of data. If we were to order all of our data in
ascending order, then the maximum would be the last number listed. The
maximum is a unique number for a given set of data. This number can be
repeated, but there is only one maximum for a data set. There cannot be two
maxima because one of these values would be greater than the other.

Example

The following is an example data set:

23, 2, 4, 10, 19, 15, 21, 41, 3, 24, 1, 20, 19, 15, 22, 11, 4

We order the values in ascending order and see that 1 is the smallest of those in
the list. This means that 1 is the minimum of the data set. We also see that 41 is
greater than all of the other values in the list. This means that 41 is the maximum
of the data set.
Uses of the Maximum and Minimum
Beyond giving us some very basic information about a data set, the maximum
and minimum show up in the calculations for other summary statistics.

Both of these two numbers are used to calculate the range, which is simply the
difference of the maximum and minimum.

The maximum and minimum also make an appearance alongside the first,
second, and third quartiles in the composition of values comprising the five
number summary for a data set. The minimum is the first number listed as it is
the lowest, and the maximum is the last number listed because it is the
highest. Due to this connection with the five number summary, the maximum
and minimum both appear on a box and whisker diagram.

Limitations of the Maximum and Minimum

The maximum and minimum are very sensitive to outliers. This is for the simple
reason that if any value is added to a data set that is less than the minimum, then
the minimum changes and it is this new value. In a similar way, if any value that
exceeds the maximum is included in a data set, then the maximum will change.

For example, suppose that the value of 100 is added to the data set that we
examined above. This would affect the maximum, and it would change from 41 to
100.

Many times the maximum or minimum are outliers of our data set. To determine
if they indeed are outliers, we can use the interquartile range rule.

The maxima of a function f(x) are all the points on the graph of the function which
are 'local maximums'. A point where x=a is a local maximum if, when we move a
small amount to the left (points with x<a) or right (points with x>a), the value of
f(x) decreases. We can visualise this as our graph having the peak of a 'hill' at
x=a.

Similarly, the minima of f(x) are the points for which, when we move a small
amount to the left or right, the value of f(x) increases. We call these points 'local
minimums', and we can visualise them as the bottom of a 'trough' in our graph.
One similarity between the maxima and minima of our function is that the
gradient of our graph is always equal to 0 at all of these points; at the very top of
the peaks and the very bottom of the troughs, the slope of our graph is
completely flat. This means our derivative, f '(x), is equal to zero at these points.

How do we find them?

1) Given f(x), we differentiate once to find f '(x).

2) Set f '(x)=0 and solve for x. Using our above observation, the x values we find
are the 'x-coordinates' of our maxima and minima.

3) Substitute these x-values back into f(x). This gives the corresponding 'y-
coordinates' of our maxima and minima.

Which of these points are maxima and which are minima?

Here we may apply a simple test. Assume we've found a stationary point (a,b):

1. Differentiate f '(x) once more to give f ''(x), the second derivative.

2) Calculate f ''(a). If f ''(a)<0 then (a,b) is a local maximum.

If f ''(a)>0 then (a,b) is a local minimum.

To see why this works, imagine moving gradually towards our point (a,b), plotting
the slope of our graph as we move. If our point is a local maximum, we can that
this slope starts off positive, decreases to zero at the point, then becomes
negative as we move through and past the point. Our slope, f '(x),
is decreasing throughout this movement, so we must have that f ''(a)<0.

The exact reverse is true if (a,b) is a local minimum. Our slope

is increasing through the same movement, so here we have that f ''(a)>0.