Industrial Equipment, Machinery & Capital Goods worked example

Warranty Reserve at 13% expected claim exposure share: a worked example in industrial equipment, machinery & capital goods

Suppose expected claim exposure share falls to 13%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimate warranty reserve for installed equipment using machines in service, expected cost per claim, claim exposure share, and fixed service reserve.

The inputs for this scenario

  • Machines under warranty: 42 machines (held at the documented default)
  • Expected warranty cost per machine: 7,800 $ / machine (held at the documented default)
  • Expected claim exposure share: 13 % (the input this scenario stresses; the baseline uses 18)
  • Known campaign and concession reserve: 35,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable warranty reserve = machines under warranty × expected warranty cost per machine × expected claim exposure share.
  • Total warranty reserve works out to 77,588 $ at these inputs, and this is the headline figure for the scenario.
  • Expected warranty cost per machine works out to 1,847 $ / machine at these inputs.
  • Variable warranty reserve works out to 42,588 $ at these inputs.
  • Known campaign and concession reserve works out to 35,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where expected claim exposure share sits at 18% and the headline result is 93,968 $, this scenario comes in 17.43% below the baseline at 77,588 $.
  • It computes the total warranty reserve as machines covered times expected cost per machine times claim exposure share, plus known campaign and concession costs. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total warranty reserve: 77,588 $ (headline result)
  • Expected warranty cost per machine: 1,847 $ / machine
  • Variable warranty reserve: 42,588 $
  • Known campaign and concession reserve: 35,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.