Assessment Tasks and Instructions

Student Name Robin

Student Number 0000006491
Course and Code
Unit(s) of Competency and Code(s) SITXMGT002 Establish and conduct business
relationships
Stream/Cluster
Trainer/Assessor Mr. Keith Poole

Assessment for this Unit of Competency/Cluster Details

Assessment 1 Short Answers
Assessment 2 Project
Assessment 3 Observations
Assessment conducted in this instance: Assessment 1 2 3

Reasonable Adjustment
1. Has reasonable adjustment been applied to this assessment?
No No further information required

Yes Complete 2.
2. Provide details for the requirements and provisions for adjustment of assessment:

Student to complete
My assessor has discussed the adjustments with me
I agree to the adjustments applied to this assessment
Signature Date

2nd Assessor to complete

I agree the adjustments applied to this assessment are reasonable
 Name

Signature Date
Assessment Guidelines
What will be assessed
The purpose of this assessment is to assess your ability to complete tasks outlined in elements and
performance criteria of this unit in the context of the job role, and:

 establish and maintain business relationships with at least two of the following:
o cooperative partner with organisation
o contractor
o customer
o networks
o supplier
 conduct formal negotiations, or make and manage agreements and contracts in relation to the two relationships
established above, relevant to the specific business context
 demonstrate the use of high-level communication and relationship building skills when conducting formal
negotiations and making commercially significant business-to-business agreements in the above business
relationships.
Place/Location where assessment will be conducted
SSH to complete

Resource Requirements
Refer to the Assessment conditions attached to the Futura Group Mapping Document located in the teacher
support tools folder or the “Assessment Conditions” for this unit in the SIT 1.0 Training Package.

For this assessment, the following materials must be available to support the negotiation process as relevant:

 preparatory facts and statistics

 key performance indicators
 market information.
 contract templates

Instructions for assessment including WHS requirements

The assessment for this unit of competency consists of 3 Parts, Part A, Part B and Part C.
Part A requires you to review the current supply and contract provisions in place for 3 suppliers relevant to your
work area in TH&E and establish new business relationships by determining alternative supplier provisions.

Part B is based on the results you have identified in Part A and requires you to conduct negotiations with 2
different suppliers to determine conditions for new supply agreements.
Part C requires you to communicate the negotiated outcomes from your negotiations with your supervisor or
trainer, conduct final negotiations where required and draw up the final legal agreements for supplies with each
supplier.

You are required to answer all questions and tasks as outlined in each Part below.

Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were explained
to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this assessment
Student Signature: Date: / /201

This assessment:
First Attempt 2nd Attempt 3nd Attempt Extension – Date: / /

Part A Satisfactory Not Yet Satisfactory

RESULT OF
Part B Satisfactory Not Yet Satisfactory
ASSESSMENT

Feedback to Student:

Assessor(s)
Date: / /
Signature(s):

Student Signature Date: / /

Assessment 2

PART A

Your Tasks

Select 3 suppliers of goods and services relevant to your area of work (e.g. Food and Beverage, Cookery,
Events, Tourism, Administration or similar) who currently supply your organisation (for example meat, fruit
and vegetables, stationery, cleaning services, laundry services, beverages, insurance etc.)

1. List the suppliers you have selected and describe the products or services they currently provide you with

Supplier 1:
Products or services provided: Beverages

Supplier 2:
Products or services provided: Fresh Vegies

Supplier 3:
Products or services provided: Meat Farm Fresh

2. List the key performance indicators/specifications that are required for the supply of each product or service
from each supplier.

Beverages: Standard purchase specification are concise description of quality, size, weight , or count factor
desired for a particular item, Specification buying will give uniformity and consistency to purchasing and
receiving, that will aid to maintain a desire food cost and create a standard product.
Fresh Vegies:
1. The fresh vegetables will be crisp, well formed, of proper tender maturity and shall not be with coarse
fibres, stringy, old or hard due to over age and over growth, spongy or fluffy due to age. The vegetables
shall be those in season commencing from early season arrivals and also late season receipts. These will
be freshly gathered, cleaned, graded for soundness and wholesomeness. Botanically fruits of plants,
roots, leaves, stem flowers and modified forms of stems, roots and leaves constitute vegetable fresh for
human consumptions.
2. 2. The vegetable fresh shall be free from insect infestation, physiological disorders, blemishes of damage
and disease. They shall also be free from discolouration, injury, damage or signs of improper storage,
handling and transportation, which renders them a poor look as to the freshness.
3. 3. The vegetable fresh shall be free from rotting, coating of waxes, mineral oil and colours.
Meat Farm Fresh: Precise specifications can:
  Reduce purchasing costs as higher quality products need not be accepted
 Ensure constant quality in menu items
 Allow for accurate competitive bidding among suppliers and so reduce costs

Specifications usually do not include general delivery procedures or purchase price. Directions and prices
can change quickly. Specifications should be well thought out and are usually not subject to quick change.

3. Research alternative suppliers for each supplier you have listed in Question 1, and obtain an alternative
quote for each supplier you currently use, based on the key performance indicators/specifications you have
identified in Question 2.

4. Once you have received the 3 quotes, compare these with the existing supplier provisions and attach a
summary which outlines the advantages and disadvantages for:

Quality

ADVANTAGES DISADVANTAGES
Emphasizing the needs of the market Production Disruption
Assures better quality performance in every sphere of
Employee Resistance
activity
Helps in checking non-productive activities and waste Quality is Expensive
Helpful in meeting the competition Discourages Creativity
It helps in developing an adequate system of
communication:

Prices: The main advantage of the price system is that prices act as signals to consumers and producers. If a
price is relatively high, consumers will cut back on purchases and the price might fall. But a high relative price
might also cause producers to try to increase output, which should also cause the price to fall. Low prices tend
to cause consumers to want to purchase more and producers to produce less. This can cause the price to rise as
well. Allowing the prices to fluctuate based on market changes allow consumers and producers to choose where
they put their resources and many brains often work better than a committee of fewer planners. Free market
prices often lead to efficient prices and market and reduce surpluses and shortages in an economy.
On the other hand, sometimes markets aren't efficient. If high prices are due to a monopoly or another
inefficient market (often called a market failure), then prices won't adjust and many consumers will not buy the
product. If the product is a lifesaving pharmaceutical and a single firm has a patent, then some consumers won't
buy the product because the price is too high. This is the major disadvantage of a price system, that lower
incomes will not have the resources to purchase the goods.
Payment conditions: Payment terms and the increase of working capital reduce the need for corporate loans,
and provide more cash stability during the peaks of expense flow. Another benefit to receiving
extended terms from the supply base is the perception of your company's stability and supplier trust.
Disadvantage: The later you pay, the higher the penalty and the higher the costs of your goods. You must
usually have to make payment within the first 10-day period or within a 30-day period if you want to keep the
costs of running your business at the lowest point.

Service provisions:
Advantage: If you sell a service, you usually don't have any inventory. Instead of buying and selling products,
you convince customers to take advantage of your ability to make their lives easier. You do not have to
manufacture, so you have no production facility, and you don't have to wait on products to be finished and
inspected so you can sell them. This frees you up to focus on sales rather than inventory or manufacturing.

Disadvantage: Your service business is harder to value than a manufacturing or retail company. Those
businesses have inventory, equipment and other hard assets that have a value. You can start a service business
with a phone and very little equipment. While this makes for a simple start-up it can make for difficult valuation.
You have to establish a track record of sales and some reliable sales projections to convince lenders of the value
of your company.

Reliability:
Managers are often in a bind when it comes to their work load; if they don't delegate to their staff, things won't
get done on time. But if they turn a task over to an employee who can't be trusted, the resultant failure will
reflect on them. So managers are always desperately looking for employees on which they can rely. A
trustworthy employee is more likely to be retained when others are let go, and a reputation for reliability is
worth a fortune when you're in the running for a promotion. When you're looking for a new job, prospective
employees will certainly ask your references about your trustworthiness.

Disadvantages of a Commitment to Reliability

While it's great to be considered a trustworthy employee, building that reputation isn't always fun. Earning trust
often means revealing information about your performance you'd rather not have known -- information your
colleagues may be tempted to use against you. To retain trust, you need to complete the tasks you've
committed to, when you've committed to get them done, and that commitment can mean long hours when
you'd rather be doing something else. In some organizations, reliable employees are "rewarded" with more and
more work and may become unfairly overburdened compared to their less-trustworthy colleagues.

Specific needs of your organisations (quantities, $ terms, purchasing power etc.)

Purchasing power parity constitutes a very old and fundamental theory of economics. The basic idea is that a
good or service should cost about the same in one economy as in another. When this doesn't happen it means
that either one currency is overvalued or another undervalued
Disadvantage: Infrastructure or services delivered could be more expensive;
PPP project public sector payments obligations postponed for the later periods can negatively reflect future
public sector fiscal indicators;
PPP service procurement procedure is longer and more costly in comparison with traditional public
procurement;
PPP project agreements are long-term, complicated and comparatively inflexible because of impossibility to
envisage and evaluate all particular events that could influence the future activity.

5. Based on your comparison, write a recommendation for whether one or several new supplier(s) should be
considered to replace any of the existing ones. Which aspects will need to be negotiated specifically where
one or several new suppliers are considered, or re-negotiated where existing suppliers are preferred?

There's a range of key considerations you need to bear in mind when setting objectives for purchase
negotiations. These might include:
 price
 value for money
 delivery
 payment terms
 after-sales service and maintenance arrangements
 quality
 lifetime costs of a product or service
 whether or not the product or service is essential to your business

6. How are the relationships with existing suppliers managed in your organisation? What does this entail in
terms of communication, monitoring and provisions to overcome supply or service issues? What are your
recommendations based on existing provisions in place (or where these do not or only partially exist)?

The following tips will help you to maintain good relationships.

 Talk to your suppliers regularly.
 Pay your suppliers' accounts promptly.
 Communicate with a supplier before the due date for payment, should you foresee a delay in paying an
account.
 Build good relations with your current suppliers' representatives.
 Be fair but firm with industry sales representatives – they can easily take up a lot of your time.
 Avoid rush orders wherever possible – they can cause significant stress in your business and put a strain
on the relationship with your suppliers.
 Monitor the financial position of your suppliers – talk with industry colleagues and competitors about
the general financial stability of those businesses that supply goods and services to you.
 Address any issues of concern in relationships with your suppliers as they arise.
 Refer damaged or faulty goods to the supplier promptly, with supporting documentation.
 Be prepared to review and renegotiate the terms of trade with your suppliers from time-to-time.
7. Where actual negotiation will take place as a result of the aspects you have identified in Question 5, you will
be observed conducting these negotiations for Part B of this assessment project.

Or

Where your organisation’s policies and procedures prevent you from negotiating or re-negotiating, you will
be observed conducting negotiations in a simulated environment in Part B of this assessment project, based
on the factors you have identified in Question 5.

1. Intercultural Conflict: Be Careful Not to Stereotype.

When negotiating with someone from a different culture, we often try to learn cultural practices that will
help us fit in or avoid causing offense. There’s a risk to focusing on cultural differences, however: we may
give too much weight to presumed cultural differences and end up over-simplifying or stereotyping the
other party as a result. When one or both sides fall into this trap, misunderstandings and conflict can arise.

2. Conflict with Friends and Family: Discuss Difficult Issues Upfront

Business negotiations between friends and family members can result in hurt feelings, damaged
relationships, or simply subpar deals. Indeed, conventional wisdom warns us against doing business with
those close to us. Yet circumstances or opportunity sometimes makes negotiations with a relative or good
friend irresistible or impossible to avoid.

3. Workplace Conflict: Test Your Assumptions and Choose a Useful Role

Employees should be given guidance on how to give good feedback so they can express their concerns in a
positive manner rather than letting them stew. People who give good feedback ask questions, stay positive,
describe how the situation makes them feel, and give specifics. They show appreciation when warranted
and make suggestions for improving working relationships.
Part B – Conducting Negotiations

You will be observed conducting negations with existing or potential new suppliers as identified in Question 5
of Part A of this assessment. The suppliers may be actual, where organisational policies and procedures
permit, or simulated, with colleagues or students as agreed to with your trainer. You are required to record all
details discussed during the negotiation talks and use these as the basis to draw up a contract for each
supplier in Part C of this assessment.

Provide the following details for at least 2 different negotiations (Negotiation 1 and 2) you will undertake:

Negotiation 1

Real Negotiation Simulated Negotiation

Supplier details
represented by:
Location
Date
Nature of negotiation e.g. pricing structure, conditions etc.
Details List all aspects that are to be discussed
Observation Criteria

SITXMGT002 Establish and conduct business relationships

Criteria S NYS S NYS Comments
Negotiation 1
Student is well presented
Student is prepared with all supportive documentation on
hand
Uses good stance and posture
Professional introduction
Friendly, professional welcome/greeting
Initial conversation is general and friendly
Maintains initial, professional “level”
The business relationship is established
Establishes ground for the negotiation
Makes eye contact
Uses effective communication skills
Uses people’s names
Takes notes as required
Uses effective listening skills
Uses negotiation skills with confidence
Considers win-win situation during negotiations
Negotiates with strategy
Employs different techniques as appropriate:
___________________
Considers each aspect of the negotiation before agreeing to
individual aspects
Negotiates with a plan B
Negotiates honestly
Considers the representative’s ground/limits
Each aspect prepared for the negotiation is addressed
A basis for an agreement is reached
The provisions for authorisation are discussed
Further provisions for communication are established
Maintains a professional level according to role
Thanks the representative
Farewells representative in a professional manner

Feedback
Negotiation 2

Real Negotiation Simulated Negotiation

Supplier details
represented by:
Location
Date
Nature of negotiation e.g. pricing structure, conditions etc.
Details List all aspects that are to be discussed
Observation Criteria

SITXMGT002 Establish and conduct business relationships

Criteria S NYS S NYS Comments
Negotiation 2
Student is well presented
Student is prepared with all supportive documentation on
hand
Uses good stance and posture
Professional introduction
Friendly, professional welcome/greeting
Initial conversation is general and friendly
Maintains initial, professional “level”
The business relationship is established
Establishes ground for the negotiation
Makes eye contact
Uses effective communication skills
Uses people’s names
Takes notes as required
Uses effective listening skills
Uses negotiation skills with confidence
Considers win-win situation during negotiations
Negotiates with strategy
Employs different techniques as appropriate:
___________________
Considers each aspect of the negotiation before agreeing to
individual aspects
Negotiates with a plan B
Negotiates honestly
Considers the representative’s ground/limits
Each aspect prepared for the negotiation is addressed
A basis for an agreement is reached
The provisions for authorisation are discussed
Further provisions for communication are established
Maintains a professional level according to role
Thanks the representative
Farewells representative in a professional manner

Feedback
Part C – Making formal agreements

1. Present the outcomes from each negotiation to your supervisor/manager or trainer and discuss the viability
of each term negotiated according to your notes. Enter the outcomes for each contractual detail you have
negotiated in the table below and indicate the changes required (if any) and/or the approval to proceed
with the agreements.

Approved Not Approved Recommended Change

Supplier 1
Contractual detail 1

Contractual detail 2

Contractual detail 3

Contractual detail 4

Contractual detail 5

Supervisor Name
Supervisor Signature
Date

Approved Not Approved Recommended Change

Supplier 2
Contractual detail 1

Contractual detail 2

Contractual detail 3

Contractual detail 4

Contractual detail 5
Supervisor Name
Supervisor Signature
Date

2. Based on the feedback from your supervisor or trainer, contact the supplier and negotiate the final changes
if required. Record the negotiated changes in the table and obtain final approval from your supervisor or
trainer.

Supplier 1 Outcome approved not approved

Details negotiated

Supplier 2 Outcome
Details negotiated

3. Contact each supplier by email and confirm the agreements made. Advise each party that you will finalise
the formal agreements for signing of all parties.

4. Draw up the contract agreements based on your final negotiated outcomes. Each contract must contain the
following details:

You are encouraged to identify legal requirements based on your own research or legal advice. The following
websites provide basic information thereto:
https://www.smallbusiness.wa.gov.au/business-topics/money-tax-and-legal/legal-matters/business-
contracts/#verbal

https://www.business.qld.gov.au/business/starting/starting-a-business/working-business-advisers/types-
business-advisers

 Names of contracting parties including trading names and ABN/ACN, as well as their contact details
 supply conditions, including volume, price, discounts, ordering periods, take or pay and delivery times
 payment terms
 specifications of goods or services supplied (scope of goods)
 warranty periods for defective goods or services
 limited liability (risk of loss or damage)
  intellectual property
 confidentiality
 insurance
 dispute resolution
 termination and exclusion clauses
 signature provisions

5. Present your final contracts to your supervisor and trainer for final approval

Part C Marking Guide Checklist

SITXMGT002 Establish and conduct business relationships S NYS S NYS Comments
1.
The negotiated terms with supplier 1 are presented
Shortfalls or changes as result from Negotiation 1 are
clarified
The requirements for changes with Supplier 1 are recorded

The negotiated terms with supplier 2 are presented

Shortfalls or changes as result from Negotiation 2 are
clarified
The requirements for changes with Supplier 2 are recorded

2. (where relevant)
Supplier 1 is contacted for further negotiation as identified
Required changes are negotiated and agreed on
The final details are recorded
The final agreements are communicated internally
The final changes are approved
Supplier 2 is contacted for further negotiation as identified
Required changes are negotiated and agreed on
The final details are recorded
The final agreements are communicated internally
The final changes are approved

3.
Supplier 1 is contacted in writing and informed of agreed
contract basis and finalisation of agreement
Supplier 2 is contacted in writing and informed of agreed
contract basis and finalisation of agreement

4.
Contract 1
The contract for Supplier 1 is drawn up using a suitable
format as suggested on legal websites or templates
Contract features names of contractual parties
Contract features contact details of contractual parties
Contract features ABN/ACN of contractual parties
All supply conditions as agreed on are detailed
The payment terms are clearly defined
The scope of goods or services are listed in detail
The contract outlines the warranty periods for defective
goods or services
The limited liability (risk of loss or damage) clause and
conditions are specified
The legal provisions for the protection of intellectual
property are defined
The confidentiality clause specifies the limitations for each
party
The insurance provisions are clearly defined
The provisions for dispute resolution and processes are
clearly set out
The termination and exclusion clauses are explicit
Signature provisions are included
The legal aspects for supply contracts have been sufficiently
identified.
Contract 2
The contract for Supplier 2 is drawn up using a suitable
format as suggested on legal websites or templates
Contract features names of contractual parties
Contract features contact details of contractual parties
Contract features ABN/ACN of contractual parties

All supply conditions as agreed on are detailed

The payment terms are clearly defined
The scope of goods or services are listed in detail
The contract outlines the warranty periods for defective
goods or services
The limited liability (risk of loss or damage) clause and
conditions are specified
The legal provisions for the protection of intellectual
property are defined
The confidentiality clause specifies the limitations for each
party
The insurance provisions are clearly defined
The provisions for dispute resolution and processes are
clearly set out
The termination and exclusion clauses are explicit
Signature provisions are included
The legal aspects for supply contracts have been sufficiently
identified.

The contracts have been submitted for approval

Feedback