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 alternatives to ownership may be relevant to this competency standard?
Alternatives may include contracting, share agreements/syndication, and machinery rings.

How may alternatives to ownership be evaluated?
The criteria for evaluating alternatives may include the annual operating costs, availability of machinery for time-critical operations, and availability of appropriate partners for syndicated machinery.

What property contexts may be relevant to this competency standard?
Contextual issues that may impact on machinery replacement plans include changes in circumstance related to debt/equity, business and personal goals, scale of operation, and alternative opportunities for capital investment.

What may be included under capital budgeting techniques?
Capital budgeting will specifically examine the future cash flows resulting from the purchase of machinery and the returns to be made on the investment. Techniques such as the calculation of net present values and internal rate of return will be appropriate. Decision-making for major investments will often involve accountants/consultants as appropriate.

What risks may be associated with high capital investment?
Risks will be related to the ability to service debt, and may result from seasonal conditions, broad economic factors, market prices and other factors.

What alternatives to ownership may be relevant to this competency standard?
Alternatives may include contracting, share agreements/syndication, and machinery rings.

How may alternatives to ownership be evaluated?
The criteria for evaluating alternatives may include the annual operating costs, availability of machinery for time-critical operations, and availability of appropriate partners for syndicated machinery.

What property contexts may be relevant to this competency standard?
Contextual issues that may impact on machinery replacement plans include changes in circumstance related to debt/equity, business and personal goals, scale of operation, and alternative opportunities for capital investment.

What may be included under capital budgeting techniques?
Capital budgeting will specifically examine the future cash flows resulting from the purchase of machinery and the returns to be made on the investment. Techniques such as the calculation of net present values and internal rate of return will be appropriate. Decision-making for major investments will often involve accountants/consultants as appropriate.

What risks may be associated with high capital investment?
Risks will be related to the ability to service debt, and may result from seasonal conditions, broad economic factors, market prices and other factors.

What evidence is required to demonstrate competence for this standard as a whole?
Competence in analysing machinery options requires evidence that machinery options have been appropriately costed and considered as part of enterprise management. The skills and knowledge required to analyse machinery options must be transferable to a range of work environments and contexts. For example, this could include different machinery, enterprises, environments and operational policies and procedures.
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:

benchmarking practices and procedures
capital budgeting techniques
relevant taxation provisions relating to investment
risks associated with investments
analysis and planning processes.

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:

calculate costs associated with machinery and use to assist decision-making
review machinery requirement
analyse returns from major capital investments in machinery.

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:

benchmarking practices and procedures
capital budgeting techniques
relevant taxation provisions relating to investment
risks associated with investments
analysis and planning processes.

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:

calculate costs associated with machinery and use to assist decision-making
review machinery requirement
analyse returns from major capital investments in machinery.

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 recording keeping in machinery inventory. (3)

Communicating ideas and information
Through recording keeping in machinery inventory. (3)

Collecting analysing and organising information
By sourcing of relevant benchmark data and other relevant information. (3)

Collecting analysing and organising information
By sourcing of relevant benchmark data and other relevant information. (3)

Planning and organising activities
Through comparisons with relevant benchmark data that relates machinery costs to enterprise. (3)

Planning and organising activities
Through comparisons with relevant benchmark data that relates machinery costs to enterprise. (3)

Working with others and in teams
Through consultation with stakeholders in analysis of options and development of management strategies. (3)

Working with others and in teams
Through consultation with stakeholders in analysis of options and development of management strategies. (3)

Using mathematical ideas and techniques
Through calculation of costs associated with machinery. (3)

Using mathematical ideas and techniques
Through calculation of costs associated with machinery. (3)

Solving problems
Through review and analysis of options and variables affecting machinery costs and usage. (3)

Solving problems
Through review and analysis of options and variables affecting machinery costs and usage. (3)

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

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