Motors, Generators & Electrification Equipment worked example

Warranty Reserve per Unit at 58% expected warranty claim rate: a worked example

This worked example runs the warranty reserve per unit numbers for a tougher week than the baseline: 58% expected warranty claim rate instead of the typical 80%. Estimate the warranty reserve to set aside per motor or generator so finance and quality teams can size warranty exposure, compare failure-rate scenarios, and price it into the unit cost.

The inputs for this scenario

  • Motors shipped: 100 units (held at the documented default)
  • Expected claim cost per claimed motor: 45 $ / unit (held at the documented default)
  • Expected warranty claim rate: 58 % (the input this scenario stresses; the baseline uses 80)
  • Fixed warranty program cost: 250 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable warranty reserve = units shipped × expected claim cost per unit × expected warranty claim rate.
  • Total warranty reserve works out to 2,860 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve per unit works out to 28.6 $ / piece at these inputs.
  • Variable warranty reserve works out to 2,610 $ at these inputs.
  • Fixed warranty program cost works out to 250 $ at these inputs.

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 25.71% below the baseline at 2,860 $.
  • Use it when pricing a motor program, closing the books on a shipment, or stress-testing reserve adequacy against a revised claim-rate forecast. 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 warranty reserve: 2,860 $ (headline result)
  • Warranty reserve per unit: 28.6 $ / piece
  • Variable warranty reserve: 2,610 $
  • Fixed warranty program cost: 250 $

Run it with your numbers

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

Last reviewed 2026-05-12.