Municipal Waste Sorting Equipment worked example

Warranty and Field Failure Reserve at 43% share of install base under warranty: a worked example

This worked example runs the warranty and field failure reserve numbers for a tougher week than the baseline: 43% share of install base under warranty instead of the typical 60%. Estimate the warranty and field failure reserve a supplier or operator should carry for installed sorting equipment.

The inputs for this scenario

  • Expected field failures in period: 12 events (held at the documented default)
  • Average cost per field failure event: 2,500 $ / event (held at the documented default)
  • Share of install base under warranty: 43 % (the input this scenario stresses; the baseline uses 60)
  • Fixed program contingency: 5,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable field failure cost = expected field failures x cost per field failure event x share of install base in scope.
  • Total warranty and field failure reserve works out to 17,900 $ at these inputs, and this is the headline figure for the scenario.
  • Reserve cost per failure event works out to 1,492 $ / piece at these inputs.
  • Variable field failure cost works out to 12,900 $ at these inputs.
  • Fixed program contingency works out to 5,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where share of install base under warranty sits at 60% and the headline result is 23,000 $, this scenario comes in 22.17% below the baseline at 17,900 $.
  • Use it at quoting time to price warranty, and quarterly to true up the reserve against actual field experience. 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 and field failure reserve: 17,900 $ (headline result)
  • Reserve cost per failure event: 1,492 $ / piece
  • Variable field failure cost: 12,900 $
  • Fixed program contingency: 5,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty and Field Failure Reserve calculator, set share of install base under warranty to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.