Key Points

• LTPD is a sampling plan for checking defects in production.
• Proper implementation saves time and money.
• It is also a useful way of managing risk.

Having a firm understanding of Lot Tolerance Percent Defective (LTPD) will save your company time. Sampling is a much more efficient method than individually checking every unit.

Overview: What Is Lot Tolerance Percent Defective?

Put simply, in a sampling plan, Lot Tolerance Percent Defective is the percent of defective units that the plan will reject 90% of the time. In turn, it also means that any sampling with a percent equal to or greater than the approved amount will be accepted 10% of the time.

3 Benefits of Lot Tolerance Percent Defective

There are multiple benefits to utilizing LTPD to determine whether a lot of goods are worth keeping. Here are the top ones:

1. Saves Time

If a lot of goods are components for an end product, it can take a considerable amount of valuable time to check every unit. Getting a sampling, figuring in LTPD, prevents undesirable Work In Process.

2. Conserves Resources

Not only does utilizing LTPD save time in sampling, but it also saves you from having to divert members of your workforce away from their tasks to check every unit.

3. Avoids Confusion

Having LTPD in place as a clear barometer for how to proceed with lots that have some defective pieces prevents confusion amongst staff.

Why Is Lot Tolerance Percent Defective Important to Understand?

There are a few reasons why it is integral for you and your business to have a firm grasp of LTPD.

It Controls Risk

It would be great if we could always know which lots are going to be accepted and which ones are going to be rejected. Unfortunately, that is not reality. In sampling, there is always the chance for human error. A good sampling plan that utilizes LTPD helps to tell us the probability of rejection.

It Is a Good Backup Resource

Even in businesses that are adamant about 100% inspection, there might be certain circumstances that pop up where this is unfeasible. Knowing how to effectively conduct a sampling plan that figures in LTPD is helpful for these situations.

It Is an Industry Standard

Of the various criteria used for selecting a plan of acceptance sampling based on attributes, LTPD is turned to time and again. Whether or not you decide to utilize it for your business, it is likely another business you are dealing with or a competitor is working with this method. Therefore, it is important to have a solid grasp of it.

Understanding Reliability

Despite what you might want to think, LTPD isn’t 100% reliable. It can be extremely useful for users looking to see where defects lie at the moment. However, you also need to consider the need for a total inspection occasionally.

An Industry Example of LTPD

A purchasing manager is dealing with a new supplier. If a sampling plan is being used to inspect the shipments of supplies, then they will agree on an appropriate LTPD as part of the sampling plan. If the given lot’s defective proportion rate goes beyond what’s acceptable, unless there are changes and future shipments fall within the acceptable range, it is unlikely the purchasing manager will continue a business relationship with the new supplier.

3 Best Practices When Thinking About LTPD

Here are a few practices to keep in mind when thinking about LTPD:

1. You Must Know the LTPD for All Sampling Plans

Whatever acceptance sampling method you use, the LTPD must be known and documented.

2. LTPD Does Not Replace Process Improvement

It is possible to direct too much time and resources to a reliance on acceptance sampling. It should not take away from the prevention of defects and the improvement of processes.

3. Know Your Objective

For a valid sampling plan, it should start by deciding on an objective for the plan. Then comes selecting the appropriate LTPD and AQL. Then comes the determination of what producer and consumer risk creates the correct amount of protection.

Other Useful Tools and Concepts

Hungry for more? You might want to consider calculating your project ROI. This is a great way of ascertaining whether a project is worth investing in or not.

Additionally, understanding the differences between continuous and discrete data can save ample time when embarking on your analysis. While similar at first glance, these are very different types of data.

Conclusion

In the real world of business, particularly in manufacturing, it is almost assured that you will come across the need for a sampling plan. Knowing Lot Tolerance Percent Defective and how to work it into your plan is a vital tool for the health of your business.