Textiles & Apparel Manufacturing worked example

Soft Goods Warranty Cost at 3.45% warranty claim rate: a worked example

What does the result look like when warranty claim rate reaches 3.45%? The full calculation is worked below with real intermediate numbers. Use it to reserve for warranty on a soft-goods line and see the per-unit warranty burden to build into price.

The inputs for this scenario

  • Soft goods units shipped in the period: 40,000 units (unchanged)
  • Average cost per warranty claim: 22 $/unit (unchanged)
  • Warranty claim rate: 3.45 % (raised for this scenario; the documented default is 3)
  • Warranty program administration cost: 5,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Warranty cost = units shipped x cost per claim x claim rate + program admin) to the inputs above produces each figure below.
  • At this operating point the engine returns 35,360 $ for total soft goods warranty cost, the number this scenario is built around.
  • At this operating point the engine returns 0.88 $ / piece for soft goods warranty cost per unit.
  • At this operating point the engine returns 30,360 $ for variable soft goods warranty cost.
  • At this operating point the engine returns 5,000 $ for fixed soft goods warranty cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where warranty claim rate sits at 3% and the headline result is 31,400 $, this scenario comes in 12.61% above the baseline at 35,360 $.
  • A figure at this level is achievable when warranty claim rate is genuinely sustained, not just peaked for a shift. It uses a single average cost per claim; a few catastrophic recalls or mixed claim severities are not captured by one blended rate.

Results at a glance

  • Total soft goods warranty cost: 35,360 $ (headline result)
  • Soft goods warranty cost per unit: 0.88 $ / piece
  • Variable soft goods warranty cost: 30,360 $
  • Fixed soft goods warranty cost adder: 5,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.