Example 1: From UN YPP Program sample paper:

A company can choose from four mutually exclusive projects. The forecasted net cash inflow for each of
the possible outcomes is:
Market
Condition
Project A
Project B
Project C
Project D

Poor

Average

Good

440

470

560

400
360
320

550
400
380

580
480
420

If the company applies the MAXI-MIN criterion, the project chosen would be?
a. Project A
b. Project B
c. Project C
d. Project D

A is the right choice.

Decision Theory
There are four types of criteria that we will look at.
Expected Value (Realist)

Compute the expected value under each action and then pick the action
with the largest expected value. This is the only method of the four that
incorporates the probabilities of the states of nature. The expected value
criterion is also called the Bayesian principle.
Maximax (Optimist)
The maximax looks at the best that could happen under each action and
then chooses the action with the largest value. They assume that they
will get the most possible and then they take the action with the best
best case scenario. The maximum of the maximums or the "best of the
best". This is the lotto player; they see large payoffs and ignore the
probabilities.
Maximin (Pessimist)
The maximin person looks at the worst that could happen under each
action and then choose the action with the largest payoff. They assume
that the worst that can happen will, and then they take the action with
the best worst case scenario. The maximum of the minimums or the
"best of the worst". This is the person who puts their money into a
savings account because they could lose money at the stock market.

Minimax (Opportunist)

Minimax decision making is based on opportunistic loss. They are the

kind that look back after the state of nature has occurred and say "Now
that I know what happened, if I had only picked this other action instead
of the one I actually did, I could have done better". So, to make their
decision (before the event occurs), they create an opportunistic loss (or
regret) table. Then they take the minimum of the maximum. That sounds
backwards, but remember, this is a loss table. This similar to the
maximin principle in theory; they want the best of the worst losses.

Example: A bicycle shop

Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They
must order bicycles for the coming season. Orders for the bicycles must be
placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20,
$67 if they order 40, $65 if they order 60, and $64 if they order 80. The
bicycles will be sold for $100 each. Any bicycles left over at the end of the
season can be sold (for certain) at $45 each. If Zed and Adrian run out of
bicycles during the season, then they will suffer a loss of "goodwill" among
their customers. They estimate this goodwill loss to be $5 per customer who
was unable to buy a bicycle. Zed and Adrian estimate that the demand for
bicycles this season will be 10, 30, 50, or 70 bicycles with probabilities of 0.2,
0.4, 0.3, and 0.1 respectively.
Actions
There are four actions available to Zed and Adrian. They have to decide which
of the actions is the best one under each criteria.
1. Buy 20 bicycles
2. Buy 40 bicycles
3. Buy 60 bicycles
4. Buy 80 bicycles
Zed and Adrian have control over which action they choose. That is the whole
point of decision theory - deciding which action to take.
States of Nature

There are four possible states of nature. A state of nature is an outcome.

1. The demand is 10 bicycles
2. The demand is 30 bicycles
3. The demand is 50 bicycles
4. The demand is 70 bicycles
Zed and Adrian have no control over which state of nature will occur. They can
only plan and make the best decision based on the appropriate decision
criteria.
Payoff Table
After deciding on each action and state of nature, create a payoff table. The
numbers in parentheses for each state of nature represent the probability of
that state occurring.
Action
State of Nature

Buy 20

Buy 40

Buy 60

Buy 80

Demand 10
(0.2)

50

-330

-650

-970

Demand 30
(0.4)

550

770

450

130

Demand 50
(0.3)

450

1270

1550

1230

Demand 70
(0.1)

350

1170

2050

2330

Ok, the question on your mind is probably "How the [expletive deleted] did you
come up with those numbers?". Let's take a look at a couple of examples.
Demand is 50, buy 60:

They bought 60 at $65 each for $3900. That is -$3900 since that is
money they spent. Now, they sell 50 bicycles at $100 each for $5000.
They had 10 bicycles left over at the end of the season, and they sold
those at $45 each of $450. That makes $5000 + 450 - 3900 = $1550.
Demand is 70, buy 40:

They bought 40 at $67 each for $2680. That is a negative $2680 since
that is money they spent. Now, they sell 40 bicycles (that's all they had)
at $100 each for $4000. The other 30 customers that wanted a bicycle,
but couldn't get one, left mad and Zed and Adrian lost $5 in goodwill for
each of them. That's 30 customers at -$5 each or -$150. That makes
$4000 - 2680 - 150 = $1170.
Opportunistic Loss Table
The opportunistic loss (regret) table is calculated from the payoff table. It is
only needed for the minimax criteria, but let's go ahead and calculate it now
while we're thinking about it.
The maximum payoffs under each state of nature are shown in bold in the
payoff table above. For example, the best that Zed and Adrian could do if the
demand was 30 bicycles is to make $770.
Each element in the opportunistic loss table is found taking each state of
nature, one at a time, and subtracting each payoff from the largest payoff for
that state of nature. In the way we have the table written above, we would
subtract each number in the row from the largest number in the row.
Action
State of Nature

Buy 20

Buy 40

Buy 60

Buy 80

Demand 10

380

700

1020

Demand 30

220

320

640

Demand 50

1100

280

320

Demand 70

1980

1160

280

Remember that the numbers in this table are losses and so the smaller the
number, the better.
Expected Value Criterion
Compute the expected value for each action.
For each action, do the following: Multiply the payoff by the probability of that
payoff occurring. Then add those values together. Matrix multiplication works
really well for this as it multiplied pairs of numbers together and adds them. If

you place the probabilities into a 1x4 matrix and use the 4x4 matrix shown
above, then you can multiply the matrices to get a 1x4 matrix with the
expected value for each action.
Here is an example of the "Buy 60" action if you wish to do it by hand.
0.2(-650) + 0.4(450) + 0.3(1550) + 0.1(2050) = 720
The expected values for buying 20, 40, 60, and 80 bicycles are $400, 740,
720, and 460 respectively. Since the best that you could expect to do is $740,
you would buy 40 bicycles.
Maximax Criterion
The maximax criterion is much easier to do than the expected value. You
simply look at the best you could do under each action (the largest number in
each column). You then take the best (largest) of these.
The largest payoff if you buy 20, 40, 60, and 80 bicycles are $550, 1270,
2050, and 2330 respectively. Since the largest of those is $2330, you would
buy 80 bicycles.
Maximin Criterion
The maximin criterion is as easy to do as the maximax. Except instead of
taking the largest number under each action, you take the smallest payoff
under each action (smallest number in each column). You then take the best
(largest of these).
The smallest payoff if you buy 20, 40, 60, and 80 bicycles are $50, -330, -650,
and -970 respectively. Since the largest of those is $50, you would buy 20
bicycles.
Minimax Criterion
Be sure to use the opportunistic loss (regret) table for the minimax criterion.
You take the largest loss under each action (largest number in each column).
You then take the smallest of these (it is loss, afterall).
The largest losses if you buy 20, 40, 60, and 80 bicycles are $1980, 1160,
700, and 1020 respectively. Since the smallest of those is $700, you would
buy 60 bicycles.

Putting it all together.

Here is a table that summarizes each criteria and the best decision.
Action
Criterion

Buy
20

Buy
40

Buy
60

Buy
80

Best
Action

Expected
Value

400

740

720

460

Buy 40

Maximax

550

1270

2050

2330

Buy 80

Maximin

50

-330

-650

-970

Buy 20

Minimax

1980

1160

700

1020

Buy 60

Practice Problem
Since there aren't any problems of this kind in the text, work this problem out,
and then you can check your answer with the instructor.
Finicky's Jewelers sells watches for $50 each. During the next month, they
estimate that they will sell 15, 25, 35, or 45 watches with respective
probabilities of 0.35, 0.25, 0.20, and ... (figure it out). They can only buy
watches in lots of ten from their dealer. 10, 20, 30, 40, and 50 watches cost
$40, 39, 37, 36, and 34 per watch respectively. Every month, Finicky's has a
clearance sale and will get rid of any unsold watches for $24 (watches are
only in style for a month and so they have to buy the latest model each
month). Any customer that comes in during the month to buy a watch, but is
unable to, costs Finicky's $6 in lost goodwill.
Back to the Math 160 homepage.
Last updated January 5, 2005 7:30 PM

What is MaxiMin criterion?

In decision theory, the pessimistic (conservative) decision
making rule under conditions of uncertainty. It states that
the decision maker should select the course of action whose worst
(maximum) loss is better than the least (minimum) loss of all other courses
of action possible in given circumstances. Also called maximin regret or

minimax criterion.

Example 2: From UN YPP Program sample paper:

What is PRINCE2?
a. Method of integrating constraints into core project phases to maximize opportunity
b. Method of planning and managing a project execution, designed to deal with constraints
c. Methodology for managing projects within a clearly defined framework
d. Methodology for repetitive, functional activities to produce products or services

C is the right choice.

PRINCE2 (PRojects IN Controlled Environments) is a process-based method for effective
project management. PRINCE2 is a de facto standard used extensively by the UK Government
and is widely recognised and used in the private sector, both in the UK and internationally.
PRINCE2 is a well thought-out approach to project management and provides a method for managing
projects within a clearly defined framework.
Before we go into the specifics of PRINCE2, there are some general points about the subject of project management
which should help put everything into context.
Whenever we decide we want to do something, go somewhere, build something, or achieve something, we need to
know the answer to some questions:

What are we trying to do?

When will we start?

What do we need?

Can we do it alone, or do we need help?

How long will it take?

How much will it cost?

These are the usual questions asked at the start of any project, and the answers are the building blocks of project
management - defining what we want to do and working out the best way we can do it.
Structured project management means managing the project in a logical, organised way, following defined steps. A
structured project management method like PRINCE2 is the written description of this logical, organised approach.
We know from experience that projects which aren't organised and controlled properly usually go disastrously wrong.
London Ambulance and Channel Tunnel, for example, both experienced very public problems of systems not working

properly and huge overspend. Structured project management methods have been developed to try to prevent such
disasters.
The PRINCE2 Methodology says that a project should have:

An organised and controlled start ie. organise and plan things properly before leaping in

An organised and controlled middle ie. when the project has started, make sure it continues to be
organised and controlled

An organised and controlled end ie. when you've got what you want and the project has finished, tidy up
the loose ends.

Example 3: From UN YPP Program sample paper:

Which of the following circumstances justifies sole source procurement?
a. Only one vendor at the location of the requirement can meet the requirement
b. Only one vendor is registered for this requirement in the vendor register
c. The buyer met with one vendor who demonstrated his capability of meeting perfectly the requirement
d. There is no competitive marketplace for the requirement needed
B is the Right Choice.

The term "no-bid contract" is a popular phrase for what is officially known as a "sole
source contract" which means that there is only one person or company that can provide the
contractual services needed, so any attempt to obtain bids would only result in that person or
company bidding on it.
A no-bid contract is awarded usually, but not always, by a government group after soliciting and
negotiating with only one firm (see 48 CFR 2.101). These contracts can be negotiated much more
quickly than a typical competitive contract because there is no due-process but on the other hand,
they are often fraught with suspicion that the company used illegal or immoral means to exclude
competitors (usually by cronyism or bribery).
Nevertheless, U.S. law permits the government to award sole source contracts under specified
circumstances (48 CFR Ch. 1, Part 6) but no-bid contracts are illegal underEuropean
Union commissioning law.[citation needed] Usually the reason is cost and urgency as a no-bid contract allows
the government to get contractors working as quickly as possible in an "urgent" situation.
Examples of potential no-bid contracts include those awarded to Blackwater and Halliburton by
the United States government for work relating to the War in Iraq.

2015 Reference Materials for Administration

1) Basic Facts About the United Nations (Go to link:
http://issuu.com/unpublications/docs/13i6isbn9789210561662_web)
Applicants should focus on main UN issues, departments/offices, resources/services, key
documents, issues & campaigns, etc.
2) The Essential Guidebook for United Nations Secretariat Staff
(Go to link: https://hr.un.org/sites/hr.un.org/files/Essential_Guide_UN_final_0.pdf)
3) United Nations HR Portal - Applicants should focus specifically on the FAQs
(Go to Link: https://hr.un.org/)
4) Umoja's website
(Go to Link: https://www.unumoja.net/display/public/Home)
&
(https://www.unumoja.net/display/public/Frequently+Asked+Questions)
Why is the UN implementing Umoja?
First we should know about ERP (Enterprise Resource Planning) - Enterprise

resource planning (ERP) is

business process management software that allows an organization to use a system of
integrated applications to manage the business and automate many back office functions
related to technology, services and human resources.
Umoja will enhance accountability, transparency and internal controls for all types of resources. It will help improve
decision making and planning capabilities by providing up-to-date and accurate reports and data. Additionally, Umoja
will enable managers to exert tighter financial planning and controls and ensure compliance with public sector
standards such as International Public Sector Accounting Standards (IPSAS).
The Umoja solution represents a once-in-a-generation opportunity for the United Nations to:

Upgrade its technology, tools and practices to those appropriate for the 21st century

Comply or exceed international industry standards (e.g. IPSAS)

Streamline fragmented administrative processes, to allow Managers and Staff to focus on value-added work
rather than red-tape;

Unify multiple IT and computer systems and platforms to avoid delays, waste and frustration.

The Umoja solution will:

Provide all Secretariat offices with an integrated transactional system.

Replace or integrate numerous existing legacy systems such as IMIS, Mercury and Sun.

Reduce time and resources spent on manual, paper-based processes.

Equip UN staff with modern technology and enhanced skills.

5) Public website for the United Nations Procurement Division Applicants should focus
specifically on the "Doing Business with the United Nations Secretariat" booklet
(Go to Link: https://www.un.org/Depts/ptd/) &
(https://www.un.org/Depts/ptd/sites/www.un.org.Depts.ptd/files/files/attachment/page/pdf/englishb.p
df)