As background for your work, the ELT briefs you on industry conditions. For the first time in the company's 10-year history, the firm has shown a significant loss and may need to review headcount. The company's CEO believes a lot of this has to do with the market, lack of resources and Operations & Production problems. The 2020 research reports indicate a drop in completed research contracts. Although the number of contracts signed showed a 20% increase last year, the number of completed contracts reached an all-time low. Moreover, there was a high rate of missed opportunities. The 2020 Operations 8: Production report indicate that although the number of elements produced per employee showed a slight increase last year, the number of defective elements reached an all-time high. In addition, there was a high rate of wastage of materials and other supplies. Although total sales (and therefore total Operations & Production) are down from the previous year, total labour costs are up. As a result, costs per element are at an all-time high. Until two years ago, the firm had enjoyed increasing profits over many years, with a record profit of over $5 million in 2018. However, in the last two years, the industry has become more competitive. COVID 19 has created many opportunities for start-ups and financing for competing companies. High-quality medical supplies and instruments are now being produced by several Middle East and Asian firms, two of which entered the Canadian market in 2017. (Previously, the main competitors in the Canadian market were U.S. and European firms, but they are not much of a problem because their products are very high priced.) The Middle East can afford to pay for Knowledge and Skills and Asia can offer low labour costs. The Middle East and Asian firms can research faster and price their products attractively; however, buyers initially held back, concerned about potential quality problems. So, for a while, it appeared as if Donnal's customers (mainly hospitals and Government Health Department) would remain loyal, even though they were themselves under pressure to cut costs, due to budget cuts. But in late 2014, the Oil and Gas Market crashed, and this cut dramatically into Donnal profits. In mid-2015, Donnal reduced its head count by 20 employees. Although the firm had reduced company positions in the past, this was the largest reduction in the company history. To make up for the loss of profits, Donnal added several new research projects and products to its line. Over the years, the company had tended to stick with the same set of research concepts and products