Tunnel Boring & Heavy Civil Equipment worked example

Warranty Reserve at 29% share of fielded units expected to file a claim: a worked example in tunnel boring & heavy civil equipment

Here is what the math looks like when conditions slip. We hold every other input steady and drop share of fielded units expected to file a claim to 29%, then walk the calculation through step by step. Estimates the warranty reserve to carry from fielded unit count, expected claim per unit, claim incidence rate, and a fixed catastrophic reserve floor.

The inputs for this scenario

  • TBMs and heavy civil units still under warranty: 8 machines (held at the documented default)
  • Expected warranty claim cost per machine: 65,000 $/machine (held at the documented default)
  • Share of fielded units expected to file a claim: 29 % (the input this scenario stresses; the baseline uses 40)
  • Minimum reserve floor held per program: 50,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total = fielded units x expected claim x (incidence rate รท 100) + reserve floor.
  • Total warranty reserve cost works out to 200,800 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve cost per unit works out to 25,100 $ / piece at these inputs.
  • Variable warranty reserve cost works out to 150,800 $ at these inputs.
  • Fixed warranty reserve adder works out to 50,000 $ at these inputs.

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 22.17% below the baseline at 200,800 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to share of fielded units expected to file a claim, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. 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: 200,800 $ (headline result)
  • Warranty reserve cost per unit: 25,100 $ / piece
  • Variable warranty reserve cost: 150,800 $
  • Fixed warranty reserve adder: 50,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Reserve calculator, set share of fielded units expected to file a claim to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.