List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
Element | Performance criteria |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Conduct market research | 1.1 Collate and evaluate estimates of supply and demand 1.2 Analyse past trends and assess possible future scenarios 1.3 Relate own products to market indicators |
2. Determine price required | 2.1 Calculate cost of production and determine break-even price 2.2 Calculate overhead costs to be allocated against the enterprise 2.3 Determine margins for profit and risk 2.4 Set forward price objectives to meet cost of production, contribution to overheads and profit required 2.5 Evaluate personal attitude to risk |
3. Develop sales plan | 3.1 Evaluate cash markets and assess projected price trends 3.2 Obtain and assess forward contract information 3.3 Obtain and assess futures prices 3.4 Evaluate selling options against price objectives and the assessment of price movement risk 3.5 Assess taxation and cash flow implications 3.6 Develop appropriate mix of sale options in a trading strategy 3.7 Develop contingency plans to address possible shifts in price trend |
4. Implement trading strategy | 4.1 Seek appropriate expertise as required 4.2 Monitor market information and adjust trading strategy according to contingency plans |
The candidate must be assessed on their ability to integrate and apply the performance requirements of this unit in a workplace setting. Performance must be demonstrated consistently over time and in a suitable range of contexts.
The candidate must provide evidence that they can:
determine cost of production
allocate overhead costs against enterprises
assess risk to financial returns through market or currency movements
analyse trends and evaluating forecasts
monitor and assess price movements
implement a trading strategy for price risk management.
The candidate must demonstrate knowledge of:
supply, demand and price relationships
price trends and sources of market information/forecasts
cost of production
overhead costs
risk assessment and attitudes to risk
selling options for the relevant commodity
operation of futures markets, forward selling arrangements, put options
foreign exchange rates
contract law
cash flow and taxation planning
contingency planning.
Competency is to be assessed in the workplace or simulated environment that accurately reflects performance in a real workplace setting.
Assessors must satisfy current standards for RTOs.