Cryogenic Storage & LNG Equipment worked example

Cryogenic Warranty Reserve at 92% expected share of units that file a claim: a worked example

This scenario runs the cryogenic warranty reserve calculation on the strong side: 92% expected share of units that file a claim, with every other input held at its documented default. Use it when cryogenic warranty reserve in cryogenic storage and lng equipment is being put through a cryogenic storage and lng equipment weighted-cost review.

The inputs for this scenario

  • Cryogenic units shipped under warranty: 100 units (unchanged)
  • Expected cost to service one warranty claim: 45 $ / unit (unchanged)
  • Expected share of units that file a claim: 92 % (raised for this scenario; the documented default is 80)
  • Fixed warranty program reserve: 250 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Expected variable warranty exposure = units under warranty × warranty cost per claim unit × claim occurrence) to the inputs above produces each figure below.
  • At this operating point the engine returns 4,390 $ for total cryogenic warranty reserve, the number this scenario is built around.
  • At this operating point the engine returns 43.9 $ / piece for warranty reserve per covered unit.
  • At this operating point the engine returns 4,140 $ for expected variable warranty exposure.
  • At this operating point the engine returns 250 $ for fixed warranty program reserve.

How this compares with the baseline

  • Against the tool's baseline example, where expected share of units that file a claim sits at 80% and the headline result is 3,850 $, this scenario comes in 14.03% above the baseline at 4,390 $.
  • Use it at shipment to book a reserve, and at period close to true it up against actual claim experience. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total cryogenic warranty reserve: 4,390 $ (headline result)
  • Warranty reserve per covered unit: 43.9 $ / piece
  • Expected variable warranty exposure: 4,140 $
  • Fixed warranty program reserve: 250 $

Run it with your numbers

  • Every input above is editable in the live Cryogenic Warranty Reserve calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.