Circular Economy, Recycling & Remanufacturing worked example

Warranty Reman Exposure at 2.02% expected reman warranty return rate: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop expected reman warranty return rate to 2.02%, then walk the calculation through step by step. Estimate warranty cost exposure for remanufactured units based on shipped volume, expected claim cost, failure share, and fixed containment cost.

The inputs for this scenario

  • Remanufactured units under warranty: 6,200 units (held at the documented default)
  • Average warranty cost per failed reman unit: 96 $ / claim (held at the documented default)
  • Expected reman warranty return rate: 2.02 % (the input this scenario stresses; the baseline uses 2.8)
  • Fixed containment, analysis, or campaign cost: 14,500 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable reman warranty claim exposure = remanufactured units in warranty population × expected warranty cost per failed reman unit × expected reman warranty return share.
  • Expected reman warranty exposure works out to 26,523 expected reman warranty exposure at these inputs, and this is the headline figure for the scenario.
  • Warranty exposure per reman unit works out to 4.28 $ / piece at these inputs.
  • Variable reman warranty claim exposure works out to 12,023 $ at these inputs.
  • Fixed containment, analysis, or campaign cost works out to 14,500 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where expected reman warranty return rate sits at 2.8% and the headline result is 31,166 expected reman warranty exposure, this scenario comes in 14.9% below the baseline at 26,523 expected reman warranty exposure.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to expected reman warranty return rate, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It uses a single expected return rate and flat cost per claim; a bimodal failure pattern (early infant-mortality plus end-of-life wear-out) is better modeled with separate cohorts.

Results at a glance

  • Expected reman warranty exposure: 26,523 expected reman warranty exposure (headline result)
  • Warranty exposure per reman unit: 4.28 $ / piece
  • Variable reman warranty claim exposure: 12,023 $
  • Fixed containment, analysis, or campaign cost: 14,500 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Reman Exposure calculator, set expected reman warranty return rate to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.