Defects found in inspection are classified into three categories: critical defects, major defects and minor defects:

1) Critical non-conformity (defect):

A non-conformity (defect) which experience and the judgment indicates is likely to result in a hazardous and injurious situation to the user, or makes the product subject to legal seizure, or not comply with any mandatory regulations (standards) or as per the customer's requirements.

2) Major non-conformity (defect):

Non-conformity (defect) other than Critical is like to result in failure, or to reduce materially the usability of the unit for its intended purpose, or having an obvious aesthetic non-conformity (defect) which affect the salability of the products and lessens the value or as per the customer's requirements. A major problem will in all probability result in the customer returning the product for exchange or refund thus affecting the customer or product reputation.

3) Minor non-conformity (defect)

Non-conformity (defect) is that not likely to reduce the usability of the product for its intended purpose or is departure from established standards, having little bearing on the effective use of the products. or as per the customer's requirements. A minor problem may give a degree of consumer dissatisfaction. Several Minor problems together may lead to the customer returning the item.

H&L inspectors in China use the MIL STD 105E tables, which are recognized standards by every industrial company.

This American standard now has equivalents in all national and international standardization organizations (ANSI/ASQC Z1.4, ISO 2859, NF06-022, BS 6001, DIN 40080).

This standard is a proven method to accept or reject a production lot by inspecting a randomly selected number of products.                                                            

This method is called  'AQL' (acceptable quality level):

As a quality control company in China, H&L uses the Acceptable Quality Level (AQL) to establish a maximum allowable error rate or variation from the standard. Acceptance testing will cease immediately if the failure rate of the product being tested exceeds the minimum Acceptable Quality Level.
NB: It is important to note that Acceptance Sampling cannot provide 100% perfect products. The only way of achieving this is to produce 100% perfect products. 

MIL STD 105E table:

Practically, H&L Quality Standards use the MIL STD 105E tables that are summarized below: 

What can I find out from the AQL tables?

Let's take a lot of 10,000 units to inspect, with an AQL of 2.5

According to Table B, the sample size is therefore 200 units, and the corresponding acceptance number is 10.

In other words:

If the number of defective units is more than 10, the lot has to be rejected.

If the lot is accepted, it is commonly perceived that there is a maximum of 2.5% of defective units in the lot (with a failure risk percentage of less than 5%).