Problem: Flame Corporation is engaged in the manufacture of a profitable product line with a 100% mark-up on cost. For the past five years, it has grown at a rate of 25% per year in sales except in the prior year when the growth was only 5%, although it remained as profitable as before. The management is concerned of the very low growth rate and of the influx of similar imported products. Management feels that profitability and employees' benefits can only be sustained with an overhaul of the entire operations. It employs a large number of technical persons in the production, research and development, and quality control sections. It is headed by a multi-awarded research director. There is a number of on-going products on research but very few gets to the market. How would you proceed with the operations audit of the production department?