Aftermarket, Field Service & Service Parts worked example

Warranty Reserve at 59% reserve capture share: a worked example in aftermarket, field service & service parts

This worked example runs the warranty reserve numbers for a tougher week than the baseline: 59% reserve capture share instead of the typical 82%. Estimate warranty reserve exposure from covered units, expected warranty cost per unit, reserve capture share, and fixed administration cost.

The inputs for this scenario

  • Units under active warranty: 1,850 units (held at the documented default)
  • Expected warranty cost per unit: 145 $ / unit (held at the documented default)
  • Reserve capture share (claims likely to hit): 59 % (the input this scenario stresses; the baseline uses 82)
  • Fixed warranty administration cost: 12,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Captured warranty exposure = units under warranty × expected warranty cost per unit × reserve capture share.
  • Warranty reserve requirement works out to 170,268 $ warranty reserve at these inputs, and this is the headline figure for the scenario.
  • Expected warranty cost per unit works out to 92.04 $ / unit at these inputs.
  • Captured warranty exposure works out to 158,268 $ warranty reserve at these inputs.
  • Fixed warranty administration cost works out to 12,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where reserve capture share sits at 82% and the headline result is 231,965 $ warranty reserve, this scenario comes in 26.6% below the baseline at 170,268 $ warranty reserve.
  • Use it at period close for accrual journal entries, when launching a product and forecasting its warranty liability, or when re-estimating reserves after a field-failure trend shifts. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Warranty reserve requirement: 170,268 $ warranty reserve (headline result)
  • Expected warranty cost per unit: 92.04 $ / unit
  • Captured warranty exposure: 158,268 $ warranty reserve
  • Fixed warranty administration cost: 12,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Reserve calculator, set reserve capture share to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.