Google Links

Follow the links below to find material targeted to the unit's elements, performance criteria, required skills and knowledge

Elements and Performance Criteria

1. Conduct market research
   • Collate and evaluate estimates of supply and demand
   • Analyse past trends and assess possible future scenarios
   • Relate own products to market indicators
2. Determine price required
   • Calculate cost of production and determine break-even price
   • Calculate overhead costs to be allocated against the enterprise
   • Determine margins for profit and risk
   • Set forward price objectives to meet cost of production, contribution to overheads and profit required
   • Evaluate personal attitude to risk
3. Develop sales plan
   • Evaluate cash markets and assess projected price trends
   • Obtain and assess forward contract information
   • Obtain and assess futures prices
   • Evaluate selling options against price objectives and the assessment of price movement risk
   • Assess taxation and cash flow implications
   • Develop appropriate mix of sale options in a trading strategy
   • Develop contingency plans to address possible shifts in price trend
4. Implement trading strategy
   • Seek appropriate expertise as required
   • Monitor market information and adjust trading strategy according to contingency plans

Range Statement

---

Performance Evidence

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.

---

Knowledge Evidence

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.

---