Motors, Generators & Electrification Equipment worked example

Warranty Reserve per Unit at 92% expected warranty claim rate: a worked example

This scenario runs the warranty reserve per unit calculation on the strong side: 92% expected warranty claim rate, with every other input held at its documented default. Use it when warranty reserve on a motor or generator program is going through a weighted-cost review against the quote.

The inputs for this scenario

  • Motors shipped: 100 units (unchanged)
  • Expected claim cost per claimed motor: 45 $ / unit (unchanged)
  • Expected warranty claim rate: 92 % (raised for this scenario; the documented default is 80)
  • Fixed warranty program cost: 250 $ (unchanged)

Working through the calculation

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

How this compares with the baseline

  • Against the tool's baseline example, where expected warranty claim rate sits at 80% and the headline result is 3,850 $, this scenario comes in 14.03% above the baseline at 4,390 $.
  • Use it when pricing a motor program, closing the books on a shipment, or stress-testing reserve adequacy against a revised claim-rate forecast. 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 warranty reserve: 4,390 $ (headline result)
  • Warranty reserve per unit: 43.9 $ / piece
  • Variable warranty reserve: 4,140 $
  • Fixed warranty program cost: 250 $

Run it with your numbers

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

Last reviewed 2026-05-12.