For the written activity the learner will complete the following assessment.

 Total
Assessment length should be between 800 -   1500 words

The written activity is a stand-alone activity that is assessed separately to the activities
that form the evidence portfolio. The written activity will allow the learner to display
required knowledge and skills that are essential when contextualizing overall
competency.

You are the Asset Manager of the Sydney Harbor Marriott Hotel at Circular Quay, your
venue has the following:

32 floors, 543 rooms, 52 suites

14 meeting rooms, 16,619 sq. ft. of total meeting space
3 concierge levels

Your organisation has many assets and they must all be documented and maintained.
You will also need to factor in a program for replacement. Now you are required to
explain in detail how you will address the following points:

Task 1: Develop practices for systematic maintenance, repair and purchase of

physical assets.

1. Why do we need to have and maintain an accurate and current physical

assets register?

Answer: There is financial consequence to not maintaining an accurate asset

register. Every business should know at any given time where their assets are
and in what condition they are in. The tracking of assets can prevent theft and
loss and the maintenance of assets can extend the life of the asset. There are
major tax benefits to any business tracking their assets correctly. In most
cases it is a statutory requirement to have an asset register.

2. Why do we need procedures for managing physical assets that reflect overall
business objectives?

Answer: Having such a system in place allows managers to track the overall
performance of their assets. This helps to ensure that they’re being utilised
efficiently, allowing for performance to be reviewed and helping to prevent any
unnecessary, additional costs being incurred due to incidents such as
unscheduled downtime
 3. Outline why having a maintenance and repair timeline with milestones will
minimise disruption and loss of revenue.

Answer: Assets that are regularly maintained will be less likely to break down.
Knowing when each asset is due for maintenance by looking at the milestone
will ensure that minimal disruption to the organization and therefore not
produce a loss of revenue.

4. Why should we consider environmental sustainability into the use of physical

assets?

Answer: We should consider environmental sustainability into the use of

physical assets in order to:

 Reduce costs;
 Lower energy and natural resource consumption
 increase efficient use of space
 Extend equipment’s useful life
 Manage inventory, purchasing or lease contracts
 Deliver business services that provide a competitive advantage

5. Why do we need to comprehend our current and potential financial capacity to

acquire physical assets?

Answer: When working with a timeline and an assets register there should be
no surprises when it comes to procuring additional or replacement assets. This
will also be factored into the organisational budget so that by the time for
replacement has arrived we have the funds available.

Prior preparation is a fundamental principle for many areas of business. With careful
monitoring it is possible to know and every aspect of your organisation and this enable
you to plan ahead. Together with a contingency element factored in this should ensure
minimal disruption to the business. Task 2, address the following questions:

Task 2: Monitor the condition and performance of physical assets.

1. Outline the benefits of reporting practices to ensure effective performance of

physical assets.
Answer: The benefits of reporting practices to ensure effective performance of
physical assets are:

 Functionality: Regular reporting helps to measure the effectiveness of an

asset. This will enable any significant impacts on services to be identified.
It will also allow timely changes to be made to improve both service
delivery and functional standards.
  Utilization: Regular Reporting practices helps to measure of how
intensively an asset is being used to meet the department's service
delivery objectives, in relation to the asset's potential capacity.

 Financial performance: Regular Reporting practices helps to determine

whether or not it is providing economically viable services.

2. Why do we need to address physical asset problems promptly and take

appropriate action without delay?

Answer: We need to address physical asset problems promptly and take

appropriate action without delay to remove the problem and have the
organisation working efficiently and all assets working to the benefit of the
organisation. If we address the need for an asset to be repaired promptly we can
prevent escalation of the problem. Assets poorly maintained over a period of time
will not only reduce in the functioning but also increase in likelihood of a
breakdown

3. Assess long-term physical asset performance.

Answer: Asset management is maintaining a desired level of service for what you
want your assets to provide at the lowest life cycle cost. Lowest life cycle cost
refers to the best appropriate cost for rehabilitating, repairing or replacing an
asset. Asset management is implemented through an asset management
program and typically includes a written asset management plan.

This is usually undertaken throughout the year but checking on the minor
milestones e.g. monthly and also checking on the major milestones e.g. 6
monthly and annually. This helps us to stay informed of the performance of the
asset and the potential longevity

4. Why may we need specialist assistance, where may you source it?

Answer: There is a large range of assets within our organisation, some of these
required licensed trades people to undertake maintenance. Certain assets will
require specialist assistance and this is usually sourced from the
manufacturer/importer
The most important area for any organisation is the area of financial viability. We need
to be making a profit from the services and or products we offer the community. When
we carefully operate our timelines, milestones and asset registers there should be very
little we are not well prepared for. Task three answer the following question:

Task 3: Coordinate financing and purchase of physical assets.

1. Why must every asset have an accurate equipment specification to guide

acquisition process?

Answer: Specifications set forth the characteristics of the property and

services to be purchased so as to enable the vendor to determine and
understand that which is to be supplied. The procurement officer may not be a
specialist in every function of your organisation, therefore it is imperative that
team members who operating the equipment construct a list of requirements
of the asset to assist the procurement officer during the purchase process.
This enable the procurement officer to know exactly what must be included in
the asset

2. How do we estimate acquisition costs based on evaluation of current,

accurate and relevant data?

Answer: To estimate the acquisition costs based on evaluation of current,

accurate and relevant data, it is important to look at the various data used for
the estimation of costs. In a project, there are various approach for cost
estimation. Some use historical costs (parametric estimation) whereas other
apply where there is limited project information (analogous estimating). On the
other hand, an approach such as three-point estimating would take three
estimates in average whereas a bottom-up estimating would include each
activity cost in detail in determining total cost of the project. From the above
techniques, it is clear that accuracy and relevant of data is critical. estimating
every component cost and aggregating it would need most current, accurate
and relevant data.

This is usually a role of the assets manager who will look at the initial cost of
the asset, understand the lifespan of the asset and the factor an increase in
the future procurement by factoring in the C.P.I. increases. This will usually
then reduce the likelihood of dramatic problems as this will all be factored into
the budget.

3. How do we make decisions on replacing and acquiring physical assets?

Answer: The decisions on replacing and acquiring physical assets is made by:
 Taking into account the organisation policies or replacement and procurement,
as well as advise from the finance department.
 Maintenance
 Age of the equipment
 Availability and cost of spare parts – if parts are no longer available, no repairs
are possible.
 Technology or capability of the equipment – newer technology may provide
better performance and possibly more features or options.
 Labor cost - for removal and replacement compared to repairing, rebuilding and
calibrating.
 Expertise required for equipment replacement or repair – repair in-house or bring
in a specialist.
 Risk management based on the criticalness of the equipment – is there a
significant risk that the equipment could shut down the plant or cause other
problems?
 Equipment downtime – does the repair require a shutdown?
 Equipment ability to meet the required specification – due to age, wear-and-tear
or just not being able to calibrate to required performance standards.

4. Select methods of financing to meet current financial objectives.

Answer: To be able to operate successfully, business might need to acquire

assets or capital equipment, such as plant or machinery. These assets may
include office furniture, computer equipment, company vehicles, engineering
machines or service equipment.  The business can buy all of this equipment
outright, or might decide to rent or lease it instead. your business. 

Some methods of financing to meet current financial objectives are:

 Hire purchase
 Lease
 Purchase
 Rent

5. Why must all procurement be in consultation with financial specialists?

Answer: All procurement be in consultation with financial specialists because

these specialists will have more knowledge of how to go about the process of
acquiring the asset. They will also have the knowledge and understanding of
what will be more beneficial to your organisation, and what will be more cost
effective, in regards to leasing, buying or lend leasing, higher purchase etc.…
 6. Why do we need to maintain accurate records of all financial agreements?

Answer: We need to maintain accurate records of all financial agreements:

 Financial records provide information to allow us to monitor the
performance of your business
 It is a legal requirement. By law, the Australian Taxation Office (ATO)
requires us to keep certain business records and penalties may apply if
you do not comply
 If we maintain good financial records, it will be easier and faster to
complete our business activity statements and other tax obligations
when they are due
 Accurate records allow us to be in better control of our business by
helping with financial planning and decision making
 We portray a more professional image that makes it easier to deal with
your bank
 Appropriate records enable us to file an accurate profits tax return
 The costs to us of an ATO audit are reduced if all of the necessary
records are readily available
 Compliance costs are less
 Losses and theft in our business may be detected
 We are in greater overall control of your business

 
 The following two areas are subject to an equipment upgrade

Bar
Kitchen

New Equipment specification to be considered for the assets to be upgraded:

Table 1

  BAR   KITCHEN
2 Ice machines 1 Dishwasher
1 Coffee making 2 6 x Burner stove
espresso machine with   ovens
2 Upright drinks fridge 1 Combi Oven
    1 Deep fryer
 

What are you required to do?

You are required to prepare the following -

 1. Prepare a Physical Assets Register for the items in the Table 1

Answer:

Asset Description Purchase Cost Opening Depreciation Depreciation Accumulated Closing Gain or Loss
Date Price WDV Rate Amount Depreciation WDV on sale
Ice Scotsman 8/6/2021 $5699 $4500 20.00% $570 $1710 800 Gain
Machines C0322MA-1E
Prodigy Plus
Series 22"
Air Cooled
Medium
Cube Ice
Machine
with 120 lb.
Dispenser -
356 lb.
Espresso 01/05/2021 $5445 $4500 15% $545 $1090 900 Gain
Machine Nuova
Simonelli
Appia II
Compact
Espresso
Machine

Upright FED LG- 01/05/2018 $1500 $1300 10% $150 $600 200 Gain
Drinks 580GE
Fridge Double Door
Colourbond
Upright
Fridge (580
liters)

Dishwasher Jackson AJ- 06/03/2018 $48000 $46000 20% $4800 $14400 3000 Gain
100 Dual
Tank High
Temperature
Conveyor
Dish
machine
Burner Commercial 03/09/2019 $3325 $3000 17% $332 $996 1500 Gain
stove with 4 Burner
ovens Range with
36” Griddle
and
Standard
Oven -
Heavy Duty
Natural Gas
Cooking
 Performance
Group for
Kitchen
Restaurant-
229,000 BTU
60”
Combi Oven Rational 08/08/2020 $25350 $22000 13% $2535 $5070 4000 Gain
iCombi Pro
10 Pan Full-
Size Electric
Combi Oven
- 208/240V
Deep Fryer Avantco 07/04/2016 $1299 $1000 15% $130 $260 150 Gain
FF518
Natural Gas
70-100 lb.
Stainless
Steel Tube
Floor Fryer

2. Prepare a Maintenance implementation schedule for each of the items in Table

1. Your schedule should clearly explain procedures and systems to reduce
maintenance costs and disruption in the future

Answer:

Qty. Items Item No. Implementation Maintenance

Date Cost
2 Ice Machine 525 8/7/2021 250/each
1 Espresso 526 8/7/2021 400/each
Machine
2 Upright 527 8/7/2021 300/each
Drink Fridge
1 Dishwasher 539 8/7/2021 200/each
2 Burner 555 8/7/2021 800/each
Stove with
Oven
1 Combi Oven 512 8/7/2021 300/each
1 Deep Fryer 543 8/7/2021 150/each
There are many ways to reduce maintenance costs and disruptions in the future which
contains reactive maintenance, preventive maintenance, predictive maintenance, and
reliability-centered maintenance. First, we can use the reactive maintenance
(breakdown maintenance) for fixing things when they break. However, since repairs are
not planned, it is a good method to employ for equipment that is not essential for
operations or has a low cost.

Second, we use preventive maintenance. This method involves periodically taking

assets offline and inspecting or repairing them at predetermined intervals. This can
extend the useful life of an asset and prevent breakdowns from occurring.

Third, predictive maintenance, we can use this way to reduce the cost by predicting the
costs before the problems will happen in the future, including reducing the risk about
using the machine. Fourth, reliability-centered maintenance, we can use this way to
analyse all the possible failure modes for each piece of equipment and customise a
maintenance plan for each individual machine

3. Describe different finance options to acquire the assets in consultation with

senior management for new equipment. (Table 1) for the kitchen and bar areas

Answer: There are two main finance options to acquire the assets:
 By buying it outright
 On hire purchase or lease

i. BUY AN ASSET OUTRIGHT: Buying outright is a good option if we

have the capital available, or if it is essential that we own the equipment.
However, large capital expenditure can affect our cash flow.

ii. HIRE PURCHASE OR LEASE: Paying for goods on hire purchase or

leasing equipment: 
 Allows us to use an asset over a fixed period in return for regular
payments
 Let’s us to choose the equipment we require, with the finance company
buying it for our business to use
 Usually makes our business responsible for the maintenance of the
asset

A Sample asset register (Appendix A) will be provided to you by your trainer including: 

Asset
Description
Purchase Date
Cost Price
Opening WDV
Depreciation Rate
Depreciation Amount
 Accumulated Depreciation
Closing WDV
Gain or Loss on Sale of Asset

Sample maintenance schedule will be provided by your trainer (Appendix B)

You must refer to this and use it as part of your answer to the case study

E.G. Deep Fryer

 inspect legs of the deep fryer

 check for oil leaks
 check for carbon on the bottom of the fryer
 check power cable and tag power cable with date
 check PowerPoint
 inspect correct temperature of oil with a high temp thermometer
 inspect the power switch on the deep-fryer

Equipment What maintenance is required? Time required Frequency required

Deep Fryer  inspect legs of the deep fryer 2-3 hours Once in a month
 check for oil leaks
 check for carbon on the bottom of the fryer
 check power cable and tag power cable with
date
 check PowerPoint
 inspect correct temperature of oil with a high
temp thermometer
 inspect the power switch on the deep-fryer

Espresso  Clean the draining hose 2-3 hours Once in a month

machine  Clean the steam wand
 Do a full backflush
 Make sure to clean the porta filters, filter
basket, and drip tray.

Upright Drink  Inspect the door 2-3 hours Once in a month

Fridge  check for freezer and the cooler of freezer
 check for every shelfs
 check power cable and tag power cable with
date inspect correct temperature e of cooler

Dishwasher  Scraping and rinsing 2-3 hours Once in a month

 Check chemical levels
 Check that the scrap tray is in place and
clean
 Check for leaks
 Check for automatic shutdown in the time
 specified in your owner’s manual
 Check the wash and rinse arms and nozzles
for cleanliness
Burner stove  Clean stovetop 2-3 hours Once in a month
with ovens  Clean range hood filters
 Inspect oven door gaskets and heating
element
 Grease valve knobs regularly
 Check thermostat is working properly
Combi Oven  Check for grease buildup 2-3 hours Once in a month
 Check heat exchanger for deformities
 Clean filter
 Check for loose or disconnected pipes
 Test draining from oven cavity and check
lines for leaks or clogs
 Check knobs, handles and gaskets and
repair as needed
 Inspect electrical connections
Ice Machines  Clean and sanitize bin liner 2-3 hours Once in a month
 Descale water system and change filters
 Clean remote- or air-cooled condenser coil
 Clean or change air filters
 Change hoses and O-rings as needed
 Inspect auger and top bearing on flake-ice
machines

4   List   10   points for a Sustainability Policy, which will encourage energy efficiency

and sustainable usage of new Assets in Table 1

 Purchase energy efficient appliances and machines

 Switch off the engine and all the machine after using them
 Control the heating and cooling
 Consider installing solar panels
 Upgrade all outdated equipment
 Regular Maintenance
 Use energy saving features of all devices
 Close the door every time after using them
 Do not open and hold in a long time
 Break the machine or the power during working sometimes
 Task 4: Design an asset register
The student is required to design and populate an asset register

Physical Asset Register

Asset Reference No: BAR0023
Asset name: Williams 2 Door Stainless Steel Bar Fridge
Description: Reliable and efficient bottle cooling meets stylish modern
design in the Williams BC2SS-80 double door back bar
cooler. This Australian made bottle fridge can effectively
store and display up to 182 bottles, perfect for busy bars,
clubs or hotels. Self-closing double glazed doors and LED
lighting reduces running costs as well as ensuring bottles are
attractively displayed to maximize sales.
Location: Behind bar till
Model: BC2SS-80
Supplier: Williams Invoice no. 00224467
Purchase date: 03/12/2020 Purchase price: $3,899.90
Serial no: 23WHDS1DSS Warranty details: 2 Years
Asset type: Bar and restaurant Depreciation Method: Prime cost

History: Depreciation / Maintenance, etc.

Date Cost Description
03/12/2021 $100 (service fee) Annual check
 All parts are in good conditions.
 The light works properly.
 Temperature in not over 4 degrees while checking.
 Checking, and recalibration of thermostats.
Cleaning schedule
 Clean filters and compressor
03/12/2022 $150 (service fee and LED Annual check before ending of warranty
Bulb)
 A LED light needs to be changed.
 Compressor is working well with no unfamiliar
sound.

Cleaning schedule
 Clean filters and compressor
References:
https://www.fermag.com/articles/9670-your-2020-planned-maintenance-checklist/
SITXFIN005 Manage physical assets – Learner Resource
Source: https://www.automationworld.com/home/article/13314500/to-repair-or-replace-
the-device-thats-the-question