PPE & Infection Control Products worked example

Warranty Reserve at 1.73% expected warranty claim rate: a worked example in ppe & infection control products

What does the result look like when expected warranty claim rate reaches 1.73%? The full calculation is worked below with real intermediate numbers. A finance partner uses it to accrue a warranty reserve on a large hospital order of isolation gowns.

The inputs for this scenario

  • PPE units under warranty: 100,000 units (unchanged)
  • Cost to replace or refund one claimed unit: 0.95 $/unit (unchanged)
  • Expected warranty claim rate: 1.73 % (raised for this scenario; the documented default is 1.5)
  • Fixed claims admin & logistics cost: 1,500 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Warranty reserve = units under warranty x cost per claim x expected claim rate% + admin & logistics) to the inputs above produces each figure below.
  • At this operating point the engine returns 3,144 $ for total warranty reserve cost, the number this scenario is built around.
  • At this operating point the engine returns 0.03 $ / piece for warranty reserve cost per unit.
  • At this operating point the engine returns 1,644 $ for variable warranty reserve cost.
  • At this operating point the engine returns 1,500 $ for fixed warranty reserve adder.

How this compares with the baseline

  • Against the tool's baseline example, where expected warranty claim rate sits at 1.5% and the headline result is 2,925 $, this scenario comes in 7.47% above the baseline at 3,144 $.
  • A figure at this level is achievable when expected warranty claim rate is genuinely sustained, not just peaked for a shift. It uses a single average claim rate and cost; a systemic defect or recall can produce claims far above the modeled rate, so treat it as a baseline accrual, not a worst-case ceiling.

Results at a glance

  • Total warranty reserve cost: 3,144 $ (headline result)
  • Warranty reserve cost per unit: 0.03 $ / piece
  • Variable warranty reserve cost: 1,644 $
  • Fixed warranty reserve adder: 1,500 $

Run it with your numbers

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

Last reviewed 2026-05-12.