Although the failure rate is low, it does not meet the Six Sigma level for which Madhu$$s firm strives. Successful quality management requires an organizational culture that fosters quality, understands its principles, and engages employees in quality implementation activities $($Wild & Wild, $2023).$ Selling products is the consequence of quality management and not the company$$s goal. The goal is to win customers.

The issue with the new pull$-$toy locomotive is perceived differently by customers and operations management. While customers expect the product to perform as promised, have a long lifespan, and be safe for their children, operations management focuses on conformity to standards.

Defective products can result in unexpected costs. The Cost of Poor Quality goes beyond direct costs. It includes warranty costs, overtime, returns, excess inventory, lost sales, compliance failure, and damage to brand reputation $($Duffy$,2013).$

If they cannot fix the issue, they should not produce the toy. This decision would demonstrate their commitment to safety, increase their reputation, and reduce the risk of accidents and lawsuits related to the choking hazard.