SITXFIN005 Manage Physical Assets: Physical Assets Management Plan

This report provides a comprehensive asset management strategy for a proposed small café, "Cafe’s Coffee," located in Sydney. It details the startup assets budget, including operating capital, inventory, and equipment. The report outlines the acquisition and management of physical assets like coffee machines, food service equipment, storage fixtures, and motorcycles, including their authorization, price comparison, environmental impact, longevity, and cost. It also addresses potential issues such as the repair and replacement of food service equipment and the maintenance of espresso and ventilation machines. The report further discusses security installations and evaluates the effectiveness of the asset management strategy, covering aspects like asset tracking, maintenance, and compliance, concluding with recommendations for improvement.

Running head: SITXFIN005 MANAGE PHYSICAL ASSETS
SITXFIN005 Manage Physical Assets
Name of the Student:
Name of the University:
Author Note

1SITXFIN005 MANAGE PHYSICAL ASSETS
Table of Contents
Assessment 1...................................................................................................................................2
Introduction..................................................................................................................................2
Café Summary.............................................................................................................................2
Start-up assets budget..................................................................................................................3
Start-up equipment budget...........................................................................................................3
Physical Asset..............................................................................................................................4
Assessment 2...................................................................................................................................6
Details of the assets that have been purchased for business........................................................6
Security installations..................................................................................................................14
Assessment 3.................................................................................................................................15
Effectiveness of the asset management strategy........................................................................15
Conclusion.....................................................................................................................................20
References and Bibliography.........................................................................................................22

2SITXFIN005 MANAGE PHYSICAL ASSETS
Assessment 1
Introduction
The asset acquisition and management strategy refers to the strategy that is adopted by an
executive, for the purpose of controlling and guiding the overall asset management activities in
an organization. The strategy in general that is adopted for the acquisition and the management
of the assets aim to explore the long-term issues that may hinder the very process of acquisition
and management of the assets of the business (Balachandran 2015).
In order to understand the concept of the asset management strategy, the issue that has
been presented in the question is that a small café has been proposed to be established. This
particular study aims to establish a strategic management plan for the newly acquired assets for
the purpose of utilization in the business. The different components that have been covered by
this particular study are asset-purchasing strategy, registration of assets, asset disposal details and
other related disclosures (Goodfriend 2014).
Café Summary
Café’s Coffee, a small café is proposed to have been located in Sydney. The small café
aims to do sincere business and provide service to its customers by in the form of coffee, other
beverages and snacks in its 2,100 square feet premium coffee bar (Mele and Sangiorgi 2015).
The start-up expenses that have been planned to incur are as follows:
 Legal expenses that will have to be incurred for obtaining licenses and permits are
estimated to be in the range of $1,000
 The marketing and promotion expenses have been estimated as $3,000

3SITXFIN005 MANAGE PHYSICAL ASSETS
 Rent expenses for the proposed coffee bar is $1.50 per square feet which amounts
to $3,150
 Other start-up expenses have been estimated at an amount of $2500 for business
utilities in the daily course of business like stationer and other related items
Start-up assets budget
Operating Capital (salaries, cash reserves and other
operations)
$65,000
Start-up Inventory $13,400
Coffee beans (10 regular brands) $4,000
Coffee filters, snacks, tea, beverages, salads,
sandwiches
$7,000
Supplies that have been retail in nature $1,400
Office supplies $1,000
Start-up equipment budget
 An espresso machine is majorly required for the successful execution of business. The
espresso machine that has been budgeted to have been bought provides a wide variety of
facilities. The machine not only grinds and produces good coffee but also facilitates
effective ice making and freezing technologies. Thus, the particular machine will not only
produce coffee but also facilitate the preparation of cold coffee, cold coffee with ice
cream and other delicacies. This particular equipment has been proposed to be rented or
leased for a trial period of six months. The cost of leasing the particular espresso machine
has been estimated to be $11,000 for a time of six months (Halim, Riyanto and Roy
2017).

4SITXFIN005 MANAGE PHYSICAL ASSETS
 The next category of assets that are listed down for the successful establishment of the
café are the fixtures or fittings. The particular budget that has been estimated for the
purpose of fixtures and fittings is $37,700
Coffee grinder $200
Food service equipment (toasters,
microwave, refrigerator, dishwasher)
$15,000
Storage fixtures and fittings (shelves, food
case, bins and other related items)
$2,000
Counter area equipment (counter top, sink
and other related items)
$6,000
Store equipment (ventilation, security and
cash register)
$11,000
Office equipment (file cabinets, furniture,
phone and other related items)
$3,000
Other miscellaneous expenses $500
Physical Asset
The physical asset that is required by business for the purpose of serving the customers
that place order for destination delivery of food is a pair of motorcycles. The number of
motorcycles has been budgeted to be two. However, with the potential expansion of business the
number of this particular fixed asset has been planned to increase. It has also been proposed that
the budget for financing the motorcycles have been planned to be arranged from a regional

5SITXFIN005 MANAGE PHYSICAL ASSETS
lending institute (Lee and Tso 2016). The budget that have been estimated for the motorcycles,
is $30,000 each, totaling to an amount of $60,000.
Assets Authoriz
ation
Price
Comparis
on
Enviro
nment
al
Impact
Longe
vity
Serial
Numb
er
ID
Num
ber
Purchase
Date
(estimate
d)
Cost Fund
Source
Start-up
Inventory
Coffee
beans Authoriz
ed by
the
asset
manage
ment
team
Obtained
from the
local
market
as the
price
seems
cheaper
No
such
impact
Estim
ated
to be
over
by a
week'
s time
Not
applic
able
XBR2
1 6/1/2018 $4,0
00
Operati
ng
Capital
Coffee
filters,
snacks, tea,
beverages,
salads,
sandwiches
Authoriz
ed by
the
asset
manage
ment
team
Obtained
from the
local
market
as the
price
seems
cheaper
No
such
impact
Estim
ated
to be
over
by a
mont
h's
time
Not
applic
able
XBR2
2 6/1/2018 $7,0
00
Operati
ng
Capital
Supplies
that have
been retail
in nature
Authoriz
ed by
the
asset
manage
ment
team
Obtained
from the
local
market
as the
price
seems
cheaper
No
such
impact
Estim
ated
to be
over
by a
mont
h's
time
Not
applic
able
XBR2
3 6/1/2018 $1,4
00
Operati
ng
Capital
Office
supplies Authoriz
ed by
the
asset
manage
ment
team
Obtained
from the
local
market
as the
price
seems
cheaper
No
such
impact
Estim
ated
to be
over
by a
mont
h's
time
Not
applic
able
XBR2
4 6/1/2018 $1,0
00
Operati
ng
Capital
Espresso
machine
Authoriz
ed by
the
asset
manage
Obtained
from a
trusted
supplier
on
The
periodi
c
cleanin
g of
Estim
ated
to run
for a
time
STE67
8
XBR2
5 6/1/2018 $11,
000
To be
leased

6SITXFIN005 MANAGE PHYSICAL ASSETS
ment
team
leasing
terms for
six
months
the
equip
ment
should
be
done in
a
contain
ed
enviro
nment
perio
d of
Three
years
Fixtures
and
Fittings
Authoriz
ed by
the
asset
manage
ment
team
Obtained
from the
local
market
as the
price
seems
cheaper
No
such
impact
Estim
ated
to run
for a
time
perio
d of
Three
years
Not
applic
able
XBR2
6 6/1/2018 $37,
700
Operati
ng
Capital
Fixed
Assets
(Motorcycl
es)
Authoriz
ed by
the
asset
manage
ment
team
Obtained
by
finance
from a
regional
lending
institute
The
vehicle
s must
be
tested
as to
wheth
er they
adhere
to the
enviro
nment
al
norms.
Estim
ated
to run
for a
time
perio
d of
Three
years
STU45
1
XBR2
7 6/1/2018 $60,
000
To be
financed
with the
help of a
lending
institute
The payment for the subsequent assets that have been purchased, have been done so on
cash basis. The corresponding purchases that of the assets have been recorded in the asset
maintenance register and the asset management team has been delegated the responsibility to
update such a register at regular intervals. The stock sheets are also updated at periodic intervals

7SITXFIN005 MANAGE PHYSICAL ASSETS
in order to properly manage the inventory of the business (Newmeyer, Swaminathan and Hulland
2016).
Assessment 2
Details of the assets that have been purchased for business
The assets that have been purchased for business should be segregated in terms of the
details for facilitating the creation of a proper asset management strategy. The list of the assets
that had been purchased has been listed down as follows:
 Coffee grinder
 Food service equipment
 Storage fixtures and fittings
 Counter area equipment
 Store equipment
 Office equipment
 Start up inventory
 Espresso machine
 Fixtures and Fittings
 Fixed Assets (Motorcycle)
The particular assets that might be in need of repair or replacement have been identified
as the food service equipment. The food service equipment in regards to the toasters, microwave,
refrigerator, dishwasher has been of prime quality. However, the four microwaves that have been
purchased for business needs repair as the hot plates for all of them have been delivered broken.

8SITXFIN005 MANAGE PHYSICAL ASSETS
The particular suppliers from whom the microwaves have been purchased have been contacted
and an agreement of the free replacement of the hot placements of the microwaves has been
arrived at.
The espresso machine also needs to be cleaned at a regular interval of two months in
order to prevent malfunctioning of the machine. The machine might have to be handled
delicately and the staff in regards to the machine has to be properly trained in order to maintain
and longer the life of the asset.
The store equipment that includes the ventilation equipments have to be maintained
properly. A proper ventilation equipment like the motorized damper would have to be
maintained and properly serviced every month or two in order to retain its quality service. The
required details and their corresponding treatment has better reflected in the following table:
Assets Description Serial
Number
Condition Operational
efficiency
Service
quality
Replacement
requirements
Coffee
grinder
The coffee
grinder has
been
purchased
with a price
of $200. The
coffee
grinder
machine has
been of
Not
applicable
The coffee
grinder
machine is
of prime
quality.
Training in
the operation
of the coffee
grinder is
required.
Optimum
service
quality has
been
guaranteed
by the
supplier
No
replacement
required

9SITXFIN005 MANAGE PHYSICAL ASSETS
optimum
quality and is
estimated to
go on for a
period more
than a year.
A total of
two coffee
grinders have
been
purchased.
Food service
equipment
The food
service
equipments
like the
microwaves
have been
sent for
replacement.
The other
equipments
have been of
optimum
quality.
Not
applicable
The food
service
equipment
that has been
bought has
been
reported to
be not of the
standard
quality.
Hence,
replacement
has been
demanded
from the
No training
required.
However,
the items
have to be
handled with
proper
efficiency.
Optimum
service
quality has
been
guaranteed
by the
supplier
Replacement
required

10SITXFIN005 MANAGE PHYSICAL ASSETS
supplier.
Storage
fixture and
fittings
The storage
fixture and
the fittings
like shelves,
food case
bins and
other related
items have
been
purchased
from a new
supplier on a
trial basis.
Not
applicable
The storage
fixtures and
fittings have
been
purchased of
such quality,
so that it
becomes an
one time
purchase for
the business
No training
required.
However,
the items
have to be
handled with
proper
efficiency.
Optimum
service
quality has
been
guaranteed
by the
supplier
No
replacement
required

11SITXFIN005 MANAGE PHYSICAL ASSETS
Counter area
equipment
The counter
area
equipment
has been
purchased
assuming that
the purchased
equipments
will have an
estimated life
time of three
years.
Not
applicable
The counter
area
equipments
that have
been
purchased is
assumed to
have a life
of three
years and is
of optimum
quality
No training
required.
However,
the items
have to be
handled with
proper
efficiency.
Optimum
service
quality has
been
guaranteed
by the
supplier
No
replacement
required
Store
equipment
The store
equipment
that includes
ventilation,
security and
cash register
have been
assumed to
be an one
time
purchase for
business. The
ventilation
equipment
Not
applicable
The store
equipments
have been
purchased of
such quality,
so that it
becomes an
one time
purchase for
the business
Training in
the operation
of the coffee
grinder is
required
Optimum
service
quality has
been
guaranteed
by the
supplier
No
replacement
required