We perform binary population-synthesis calculations to investigate the incidence of low-mass X-ray binaries (LMXBs) and their birth rate in the Galaxy. We use a binary-evolution algorithm that models all the relevant processes including tidal circularization and synchronization. Parameters in the evolution algorithm that are uncertain and may affect X-ray binary formation are allowed to vary during the investigation. We agree with previous studies that under standard assumptions of binary evolution the formation rate and number of black hole (BH) LMXBs predicted by the model are more than an order of magnitude less than what is indicated by observations. We find that the common-envelope process cannot be manipulated to produce significant numbers of BH LMXBs. However, by simply reducing the mass-loss rate from helium stars adopted in the standard model, to a rate that agrees with the latest data, we produce a good match to the observations. Including LMXBs that evolve from intermediate-mass systems also leads to favourable results. We stress that constraints on the X-ray binary population provided by observations are used here merely as a guide as surveys suffer from incompleteness and much uncertainty is involved in the interpretation of results.