Jewelry, Watches & Precision Luxury Goods worked example

Repair Reserve at 6.9% expected warranty claim rate: a worked example

Push expected warranty claim rate up to 6.9% and the picture changes. This example computes every intermediate figure at that operating point. Use when planning the financial reserve for warranty repairs on luxury jewelry or watches. Critical for brands offering 2 to 5 year warranties on movements, clasps, stone settings, or plating. Helps set retail prices that cover anticipated service costs.

The inputs for this scenario

  • Pieces sold during warranty period: 200 pieces (unchanged)
  • Average repair cost per warranty claim: 175 $ / claim (unchanged)
  • Expected warranty claim rate: 6.9 % (raised for this scenario; the documented default is 6)
  • Fixed service program cost: 500 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable repair reserve = pieces sold × average repair cost × claim rate / 100) to the inputs above produces each figure below.
  • At this operating point the engine returns 2,915 $ for total repair reserve, the number this scenario is built around.
  • At this operating point the engine returns 14.58 $ / piece for repair reserve per piece sold.
  • At this operating point the engine returns 2,415 $ for variable repair reserve.
  • At this operating point the engine returns 500 $ for fixed service program cost.

How this compares with the baseline

  • Against the tool's baseline example, where expected warranty claim rate sits at 6% and the headline result is 2,600 $, this scenario comes in 12.12% above the baseline at 2,915 $.
  • It computes the total dollars to reserve for warranty repairs plus fixed service program cost, and the reserve allocated per piece sold. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Total repair reserve: 2,915 $ (headline result)
  • Repair reserve per piece sold: 14.58 $ / piece
  • Variable repair reserve: 2,415 $
  • Fixed service program cost: 500 $

Run it with your numbers

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

Last reviewed 2026-05-12.