Rare Earth Magnet & Motor Materials worked example

Field Failure Reserve at 1.8% expected field failure rate: a worked example in rare earth magnet & motor materials

Here is what the math looks like when conditions slip. We hold every other input steady and drop expected field failure rate to 1.8%, then walk the calculation through step by step. Estimate the warranty reserve to set aside for in-field magnet demagnetization, corrosion or delamination failures.

The inputs for this scenario

  • Motors shipped: 5,000 units (held at the documented default)
  • Warranty claim cost: 180 $/unit (held at the documented default)
  • Expected field failure rate: 1.8 % (the input this scenario stresses; the baseline uses 2.5)
  • Claims administration overhead: 4,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total reserve = motors shipped x claim cost x failure rate + admin overhead.
  • Total field failure reserve cost works out to 20,200 $ at these inputs, and this is the headline figure for the scenario.
  • Field failure reserve cost per unit works out to 4.04 $ / piece at these inputs.
  • Variable field failure reserve cost works out to 16,200 $ at these inputs.
  • Fixed field failure reserve adder works out to 4,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where expected field failure rate sits at 2.5% and the headline result is 26,500 $, this scenario comes in 23.77% below the baseline at 20,200 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to expected field failure rate, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It assumes a flat expected failure rate and a uniform per-claim cost, so it will not capture bathtub-curve early-life spikes or a few catastrophic high-cost returns.

Results at a glance

  • Total field failure reserve cost: 20,200 $ (headline result)
  • Field failure reserve cost per unit: 4.04 $ / piece
  • Variable field failure reserve cost: 16,200 $
  • Fixed field failure reserve adder: 4,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Field Failure Reserve calculator, set expected field failure rate to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.