This unit applies to the analysis of machinery options within an agricultural, horticultural or land management enterprise and requires expertise of benchmarking practices and procedures, energy efficiency, capital budgeting techniques, relevant taxation provisions relating to investment, risks associated with investments and analysis and planning processes.

ELEMENT

PERFORMANCE CRITERIA

1. Calculate costs associated with machinery and use to assist decision making

1.1. Overhead, operating and intangible costs related to machinery are calculated.

1.2. Relevant benchmark data that relates machinery costs to enterprise productivity is sourced and compared to own enterprise data.

1.3. Comparison of productivity and suitability of different types and brands of machinery is made.

2. Review machinery requirements

2.1. Machinery inventory is reviewed in the context of the goals of the business, and current and future productivity and profitability levels.

2.2. Alternatives to ownership are identified, costed and evaluated.

2.3. Tax impact of the capital investment is identified through appropriate professional support and incorporated into the analysis.

2.4. Risks associated with high capital investment in machinery are assessed and controlled in making machinery decisions.

3. Analyse returns from major capital investments in machinery

3.1. Capital budgeting techniques including energy efficiency are used to calculate the rate of return on major investment decisions.

3.2. Plan and analysis of machinery options are reviewed and refinements are recorded.

Required skills

calculate costs associated with machinery

review machinery inventory and requirement

evaluate and cost options

assess investment risk

budget and incorporate benchmarks

calculate returns from major capital investments in machinery

document a comprehensive report

use literacy skills to fulfil job roles as required by the organisation. The level of skill may range from reading and understanding documentation to completion of written reports

use oral communication skills/language competence to fulfil the job role as specified by the organisation, including questioning, active listening, asking for clarification, negotiating solutions and responding to a range of views

use numeracy skills to estimate, calculate and record complex workplace measures

use interpersonal skills to work with others and relate to people from a range of cultural, social and religious backgrounds and with a range of physical and mental abilities.

Required knowledge

benchmarking practices and procedures, including energy efficiency, carbon footprint and water use efficiency

capital budgeting techniques

relevant taxation provisions relating to investment

risks associated with investments

analysis and planning processes.

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

The evidence required to demonstrate competency in this unit must be relevant to workplace operations and satisfy holistically all of the requirements of the performance criteria and required skills and knowledge and include achievement of the following:

calculate the total running cost of machinery

review the machinery needs of the enterprise and evaluate costed alternative options

budget the calculated rate of return on investments using benchmarks of energy efficiency

compare the productivity and suitability of different types and brands of machinery

analyse the financial costs, tax impact and investment risk for different types of machinery

document the analysis and define the preferred option

review the investment plan and analysis of options.

Context of and specific resources for assessment

Competency requires the application of work practices under work conditions. Selection and use of resources for some worksites may differ due to the regional or enterprise circumstances.

The range statement relates to the unit of competency as a whole.

The factors may include:

the range of farming systems

financing arrangements

machinery types

budgeting variables, including energy efficiency

machinery ownership options.

Unit sector

Machinery operations and maintenance

This unit contains employability skills.