Answer To: ThiThis assignment requires the student to produce an ‘Asset Management Plan’ to describe in full...
Preeta answered on Nov 22 2021
Contents
1. Introduction: 1
1.1 Background: 1
1.2 Goals and objectives of asset ownership: 1
1.3 Plan framework: 2
1.4 Basic and advanced asset management: 2
2. Levels of service: 2
2.1 Customer Research and Expectation: 2
2.2 Strategic and Corporate Goals: 2
2.3 Legislative Requirements: 3
2.4 Current Level of Service: 3
2.5 Desired Level of Service: 3
3. Future Demand: 3
3.1 Demand forecast: 3
3.2 Changes in Technology: 4
3.3 Demand Management Plan: 4
4. Life-cycle management plan: 5
4.1 Background data: 5
4.2 Routine maintenance plan: 5
4.2.1 Maintenance Plan: 5
4.2.2 Standards and Specifications: 6
4.2.3 Summary of Future Costs 6
4.3 Renewal/replacement plan: 6
4.3.1 Renewal Plan: 6
4.3.2 Renewal Standards: 6
4.3.3 Summary of Future Costs 8
4.4 Creation/Acquisition/Augmentation Plan: 9
4.4.1 Selection Criteria: 9
4.4.2 Standards and Specifications: 9
4.4.3 Summary of Future Costs: 9
4.5 Disposal Plan: 9
5. Financial summary: 10
5.1 Financial Statements and Projections: 10
5.2 Funding Strategy: 11
5.3 Valuation Forecasting: 11
5.4 Key Assumptions made in Financial Forecasts: 12
6. Proposed AM practices: 12
6.1 Accounting/Financial Systems: 12
6.2 Asset Management Systems: 12
6.3 Information Flow Requirements and Processes: 12
7. Plan improvement and monitoring: 13
7.1 Performance measures: 13
7.2 Improvement Programme: 13
7.3 Monitoring and Review Procedures: 14
8. Conclusions: 14
References: 15
1. Introduction:
1.1 Background:
An asset management plan has been presented in this report. “the consideration of all relevant costs and revenues associated with the ‘acquisition’ and ‘ownership’ of a asset”. The International Standards Organisation (ISO) (BS-ISO, 2008).
The report has been prepared on The Samton hotel, on which the long term strategies will be formulated and established. It is operating since July, 2019 at the heart of a major city. The building was built over an area of 12,942 m2, with seven floors at a cost of $111.4m. The hotel has three types of rooms, standard twins, king and queen.
1.2 Goals and objectives of asset ownership:
Like many other business organizations, in this case, assets are being maintained to meet the demands of service delivery. Under such circumstance, it becomes necessary to maintain the quality and the accessibility of the asset. Fixed tangible assets are used to generate business income based on the location and condition so that the future total cost of ownership can be planned and the organizational requirements can be met.
An asset life cycle management is a method to optimise the asset use throughout its life cycle. It is an important business practice to develop a strategic asset management plan (AMP), with an understanding the end-to-end life cycle.
1.3 Plan framework:
Life cycle management plan is to be made as per the levels of service and future demand of the organization from the particular asset. In that life cycle management plan, maintenance, replacement and operational costs are also to be included.
1.4 Basic and advanced asset management:
In advanced asset management, the related facets are also taken into account and the plan is monitored and regulated at regular intervals but in basic plan, regulating and monitoring is not done. Managers should apply the type of asset management based on the type of the asset.
2. Levels of service:
2.1 Customer Research and Expectation:
This is highly based on the knowledge and resources of the owner as well as the employees working in the organization. Since the case is being done on a hotel, so the knowledge of the service to be provided to the clients are very important. Not only the employees but also the management and the owner should have adequate knowledge on the service so that the customer receives a premium quality service and is satisfied ultimately. The management and the employees in this case should have adequate knowledge on the ways to use the asset.
2.2 Strategic and Corporate Goals:
The goal of the use of the asset should be to provide benefits to the customers. Customer satisfaction and to make them loyal is the most important target of any of the business organizations.
2.3 Legislative Requirements:
AASB 116 on property, plant and equipment mentions rules and regulations regarding the depreciation of the assets, those are to be followed by the company during the maintenance of the asset so that the cost is well spread through out the life of the asset.
2.4 Current Level of Service:
The current level of service is satisfactory as it is evident from the reactions of the customers.
2.5 Desired Level of Service:
The overall service needs to be improved with time by enhancing the quality of the asset and the quality of the employees so that better quality of service can be provided to the customers.
3. Future Demand:
3.1 Demand forecast:
The following table presents the demand of the hotel rooms in the next five years:
Tariff
Standard Twin
Queen
King
Current
4,950
15,000
6,525
Year 1
5,000
15,575
7,025
Year 2
5,250
16,670
7,450
Year 3
5,565
17,750
8,850
Year 4
5,870
18,250
9,550
Year 5
6,000
20,000
10,000
As it is evident, the demand is expected to increase over the years and so will be the profit of the hotel. It is to be ensured that the assets are utilized in such a way so that these demand forecasts are actually met.
3.2 Changes in Technology:
Although not many assets in a hotel change as per the change in the technology yet there are a few assets which might change due to the change in the technology. Computer systems, mobile and internet communications are to be changed at regular intervals and the technology changes and the existing systems become outdated. There is not only chance of error in work with the old system but also the satisfaction level of the customers will reduce by seeing the old systems....