Marine, Shipbuilding & Boat Manufacturing worked example

Vessel Warranty Reserve Cost with vessels under warranty of 23 vessels: a worked example

This worked example runs the vessel warranty reserve cost numbers for a tougher week than the baseline: vessels under warranty of 23 vessels instead of the typical 45 vessels. Estimate the warranty reserve to set aside per vessel based on historical claim rate, average claim cost, fleet size under warranty, and fixed warranty administration cost.

The inputs for this scenario

  • Vessels under warranty: 23 vessels (the input this scenario stresses; the baseline uses 45)
  • Average claims per vessel per year: 2.5 claims / vessel / yr (held at the documented default)
  • Average cost per warranty claim: 650 $ / claim (held at the documented default)
  • Fixed annual warranty admin cost: 35,000 $ / yr (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Annual warranty claim cost = vessels under warranty x claims per vessel x cost per claim.
  • Total annual warranty reserve needed works out to 35,374 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve per vessel per year works out to 1,538 $ / piece at these inputs.
  • Annual warranty claim cost works out to 374 $ at these inputs.
  • Fixed warranty administration cost works out to 35,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where vessels under warranty sits at 45 vessels and the headline result is 35,731 $, this scenario comes in 1% below the baseline at 35,374 $.
  • Use it when setting annual warranty accruals, pricing warranty into a quote, or reviewing whether claim experience justifies a reserve change. 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

  • Total annual warranty reserve needed: 35,374 $ (headline result)
  • Warranty reserve per vessel per year: 1,538 $ / piece
  • Annual warranty claim cost: 374 $
  • Fixed warranty administration cost: 35,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Vessel Warranty Reserve Cost calculator, set vessels under warranty to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.