[ International Feasibility Study ] [ 3 of 3 ] [ 14/11/2019 ] Student product assessment task © Content is subject to copyright, RMIT University FINAL APPROVED – STUDENT PRODUCT ASSESSMENT TASK...

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[ International Feasibility Study ] [ 3 of 3 ] [ 14/11/2019 ] Student product assessment task © Content is subject to copyright, RMIT University FINAL APPROVED – STUDENT PRODUCT ASSESSMENT TASK TEMPLATE – June 2019_Version 2.0 Page 1 of 6 STUDENT RMIT Classification: Trusted STUDENT - PRODUCT ASSESSMENT TASK Task Number 3 of 3 Task Name International Feasibility Study National unit/s code BSBFIA501 National unit/s title Report on Finances Related to International Finances National qualification code BSB50815 National qualification title Diploma of International Business RMIT Program code C5372 RMIT Course code MKTG7887C Section A - Assessment Information Duration and/or due date: This assessment is to be completed and submitted by the end of Week 15 Sunday 11:55pm. Task Instructions Type of Product (tick which applies) ☐ Project ☐ Report ☐ Portfolio  Case study Summary and Purpose of Assessment There are a total of three (3) assessment tasks you need to complete for this unit. This is assessment task 3 of 3 that you need to complete satisfactorily in order to be deemed competent for this unit. This assessment will allow you to calculate the viability of an Australian company doing business internationally. You will analyse their sales and cost figures and recommend the best strategy for them to continue their international operations. The viability of the venture will be assessed using foreign exchange rates as a key consideration for the international operations. Assessment Instructions What This assessment is based on a case study – CV Olive Oils Pty Ltd. There are 8 questions which students must complete. All work must be submitted in a report format. No hand-written work will be accepted. All reports must conform to the format explained in the lecture notes. Scenario – CV Olive Pty Ltd. CV (Central Victorian) Olive Oils are centralised wholesalers and retailers of olive oil products. They are considering exporting Australian olive oil products overseas as an expansion project to two cities, one in continental Europe and the other in the UK. They also sell an equal amount in Melbourne. Their initial research indicates that Australian olive oil product sales are popular in European and British markets. This is because the Australian product is superior to their standard market range in taste and quality and second to none to its counterparts (in Europe) and therefore can attract a profitable market sector as well as a global expansion. CV has contacted some distributors and believes that they will be price competitive and profitable despite taking on the responsibility for paying all transport costs in both locally consolidation and delivery to overseas distributors. [ International Feasibility Study ] [ 3 of 3 ] [ 14/11/2019 ] Student product assessment task © Content is subject to copyright, RMIT University FINAL APPROVED – STUDENT PRODUCT ASSESSMENT TASK TEMPLATE – June 2019_Version 2.0 Page 2 of 6 STUDENT RMIT Classification: Trusted Distribution The distributors are based in Paris and London. Arrangements have been made with distributors in both cities. The London and Paris distributors will cover transport costs and responsibilities from their warehouses to their local wholesalers and retailers. CV has confirmed that local costs within Australia and main shipping costs will be covered by them (CV). The operation Negotiations have been conducted across 3 independent Victorian producers, each providing 3 standard market quality levels of product in which orders will be placed for all 3. The olive oils are packaged in class bottles designed to be both storage and a serving device, with contents of 275mil per bottle. The olive oil orders will be transported to CV’s warehouse in Laverton from each producer at CV’s cost. They will then be mixed to give each shipment to the two overseas cities a 1/3 of a container each for the different quality levels of olive oil. Melbourne has the same mix. It is therefore decided that the fixed operational costs should be split evenly between the three lines of olive oil as an indicative costing. All other costs can be directly linked to each of the products and need to be analysed as such. This is a new venture for CV as a wholesaler and is set to analyse potential expansion outside of their normal business operations and hence will be recorded separately. This will the case until it can be proven that the export of olive oil under an export business structure can be/is a viable stand-alone operation. The venture will leverage off the current experience and assets of the local distribution business pending profitable results. Assumptions CV plans to ship one container to each city each month starting from February 2021, plus sell one container in Melbourne. All revenue will be received and all costs paid in the month in which they occur. All olive oil will be sold in the month of shipment. All orders (and quality levels) are provided in 275mil class bottles and will be transported in reinforced cartons and crated pallets. Each carton will contain 24 bottles, each crated pallet will be packed with 60 cartons and each container will hold 30 pallets. The Financials The following exchanges rates apply to this analysis $1 = GBP 0.5600 $1 =Euro 0.7700 Selling Prices London Paris Melbourne Selling Price per carton Basic GBP 55.00 € 58.00 $90 Mid-Range GBP 65.00 € 75.00 $100 Premium GBP 76.00 € 86.00 $110 Macedon Olive Oil Grampians Olive Oil Heathcote Olive Oils Product cost from the farms/suppliers Basic Mid Range Premium Cost per carton of Olive Oil $14.00 $16.00 $18.00 [ International Feasibility Study ] [ 3 of 3 ] [ 14/11/2019 ] Student product assessment task © Content is subject to copyright, RMIT University FINAL APPROVED – STUDENT PRODUCT ASSESSMENT TASK TEMPLATE – June 2019_Version 2.0 Page 3 of 6 STUDENT RMIT Classification: Trusted Transportation Cost per pallet $6.00 $6.00 $8.00 Handling costs per carton $0.60 $0.60 $0.60 Freight on Board per container $1,575.00 $1,575.00 $1,575.00 London Paris Shipping costs per container A$ 6,000.00 A$ 6,000.00