Elements and Performance Criteria

The Range of Variables explains the contexts within which the performance and knowledge requirements of this standard may be assessed. The scope of variables chosen in training and assessment requirements may depend on the work situations available.

What market research may be relevant to this competency standard?
Market research will be focused on supply and demand and the resultant impact on prices for the product. Monitoring of day-to-day shifts in price, price trends and supply and demand will underpin the required market research.

What market indicators should be considered?
Indicator prices related to the specifications of the products being produced will be monitored on a very regular routine basis.

What may be included under cash markets?
Cash markets may relate to markets that do not involve any hedging or forward selling.

What contingency plans may be relevant to this competency standard?
Contingency plans may involve re-diverting intended sales from one market option to another or withdrawal from particular markets.

How might market information be monitored?
Monitoring may be conducted through subscription arrangements with professional analysts, or by direct market monitoring of market information provided in the media.

What market research may be relevant to this competency standard?
Market research will be focused on supply and demand and the resultant impact on prices for the product. Monitoring of day-to-day shifts in price, price trends and supply and demand will underpin the required market research.

What market indicators should be considered?
Indicator prices related to the specifications of the products being produced will be monitored on a very regular routine basis.

What may be included under cash markets?
Cash markets may relate to markets that do not involve any hedging or forward selling.

What contingency plans may be relevant to this competency standard?
Contingency plans may involve re-diverting intended sales from one market option to another or withdrawal from particular markets.

How might market information be monitored?
Monitoring may be conducted through subscription arrangements with professional analysts, or by direct market monitoring of market information provided in the media.

What evidence is required to demonstrate competence for this standard as a whole?
Competence in managing price risk through trading strategy requires evidence that price risk has been successfully and appropriately managed in an enterprise. The skills and knowledge required to manage price risk through trading strategy must be transferable to a range of work environments and contexts. For example, this could include different commodity areas, enterprises and trading environments.
What specific knowledge is needed to achieve the performance criteria?

Knowledge and understanding are essential to apply this standard in the workplace, to transfer the skills to other contexts, and to deal with unplanned events. The knowledge requirements for this unit are listed below:

supply, demand and price relationships
price trends and sources of market information/forecasts
cost of production
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.

What specific skills are needed to achieve the performance criteria?

To achieve the performance criteria, some complementary skills are required. These skills include the ability to:

determine cost of production
assess risk
analyse trends and evaluate forecasts
monitor and assess price movements.

Are there other competency standards that could be assessed with this one?
This competency standard

Essential Assessment Information
There is essential information about

What specific knowledge is needed to achieve the performance criteria?

Knowledge and understanding are essential to apply this standard in the workplace, to transfer the skills to other contexts, and to deal with unplanned events. The knowledge requirements for this unit are listed below:

supply, demand and price relationships
price trends and sources of market information/forecasts
cost of production
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.

What specific skills are needed to achieve the performance criteria?

To achieve the performance criteria, some complementary skills are required. These skills include the ability to:

determine cost of production
assess risk
analyse trends and evaluate forecasts
monitor and assess price movements.

Are there other competency standards that could be assessed with this one?
This competency standard

Essential Assessment Information
There is essential information about

There are a number of processes that are learnt throughout work and life, which are required in all jobs. They are fundamental processes and generally transferable to other work functions. Some of these are covered by the key competencies, although others may be added. The questions below highlight how these processes are applied in this competency standard. Following each question a number in brackets indicates the level to which the key competency needs to be demonstrated where 0 = not required, 1 = perform the process, 2 = perform and administer the process and 3 = perform, administer and design the process.
Communicating ideas and information
Through the development of a sales plan. (3)

Communicating ideas and information
Through the development of a sales plan. (3)

Collecting analysing and organising information
Through conducting market research. (3)

Collecting analysing and organising information
Through conducting market research. (3)

Planning and organising activities
In accordance with sales plan and forward price objectives. (3)

Planning and organising activities
In accordance with sales plan and forward price objectives. (3)

Working with others and in teams
Through consultation with stakeholders in market research and development of a sales plan. (3)

Working with others and in teams
Through consultation with stakeholders in market research and development of a sales plan. (3)

Using mathematical ideas and techniques
Through calculations involved in determining margins for profit and risk. (3)

Using mathematical ideas and techniques
Through calculations involved in determining margins for profit and risk. (3)

Solving problems
Through dealing with changing trade environments and options. (3)

Solving problems
Through dealing with changing trade environments and options. (3)

Using technology
Through use of computers and communication systems. (3)

Using technology
Through use of computers and communication systems. (3)