Tunnel Boring & Heavy Civil Equipment worked example

Warranty Reserve at 46% share of fielded units expected to file a claim: a worked example in tunnel boring & heavy civil equipment

What does the result look like when share of fielded units expected to file a claim reaches 46%? The full calculation is worked below with real intermediate numbers. Use it at delivery to set aside a defensible warranty provision per machine while holding a baseline floor against rare high-cost recall events.

The inputs for this scenario

  • TBMs and heavy civil units still under warranty: 8 machines (unchanged)
  • Expected warranty claim cost per machine: 65,000 $/machine (unchanged)
  • Share of fielded units expected to file a claim: 46 % (raised for this scenario; the documented default is 40)
  • Minimum reserve floor held per program: 50,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Total = fielded units x expected claim x (incidence rate รท 100) + reserve floor) to the inputs above produces each figure below.
  • At this operating point the engine returns 289,200 $ for total warranty reserve cost, the number this scenario is built around.
  • At this operating point the engine returns 36,150 $ / piece for warranty reserve cost per unit.
  • At this operating point the engine returns 239,200 $ for variable warranty reserve cost.
  • At this operating point the engine returns 50,000 $ for fixed warranty reserve adder.

How this compares with the baseline

  • Against the tool's baseline example, where share of fielded units expected to file a claim sits at 40% and the headline result is 258,000 $, this scenario comes in 12.09% above the baseline at 289,200 $.
  • A figure at this level is achievable when share of fielded units expected to file a claim is genuinely sustained, not just peaked for a shift. It assumes a single average claim severity across all units; a TBM fleet with mixed ground conditions (hard rock vs soft-ground EPB) will have very different failure profiles, so blend or segment the population before trusting one number.

Results at a glance

  • Total warranty reserve cost: 289,200 $ (headline result)
  • Warranty reserve cost per unit: 36,150 $ / piece
  • Variable warranty reserve cost: 239,200 $
  • Fixed warranty reserve adder: 50,000 $

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.