Mining Vehicle & Underground Equipment worked example

Warranty Reserve at 29% expected claim incidence rate: a worked example in mining vehicle & underground equipment

Suppose expected claim incidence rate falls to 29%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimate the warranty reserve needed to cover field repair claims on delivered mining vehicles and underground equipment.

The inputs for this scenario

  • Machines under active warranty: 12 units (held at the documented default)
  • Average warranty claim cost per machine: 38,000 $/unit (held at the documented default)
  • Expected claim incidence rate: 29 % (the input this scenario stresses; the baseline uses 40)
  • Reserve administration setup cost: 9,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total reserve = machines x avg claim cost x incidence % + admin setup.
  • Total warranty reserve cost works out to 141,240 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve cost per unit works out to 11,770 $ / piece at these inputs.
  • Variable warranty reserve cost works out to 132,240 $ at these inputs.
  • Fixed warranty reserve adder works out to 9,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where expected claim incidence rate sits at 40% and the headline result is 191,400 $, this scenario comes in 26.21% below the baseline at 141,240 $.
  • It computes total warranty reserve as machines under warranty times average claim cost times claim incidence rate, plus a fixed administration setup cost. 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 cost: 141,240 $ (headline result)
  • Warranty reserve cost per unit: 11,770 $ / piece
  • Variable warranty reserve cost: 132,240 $
  • Fixed warranty reserve adder: 9,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.