Waste-to-Energy Equipment worked example

Warranty Reserve at 35% expected claim occurrence rate: a worked example in waste-to-energy equipment

What does the result look like when expected claim occurrence rate reaches 35%? The full calculation is worked below with real intermediate numbers. Used by finance and aftermarket teams to set a balance-sheet reserve covering warranty exposure on a delivered equipment fleet.

The inputs for this scenario

  • Units under warranty: 18 units (unchanged)
  • Expected claim cost per unit: 24,000 $/unit (unchanged)
  • Expected claim occurrence rate: 35 % (raised for this scenario; the documented default is 30)
  • Fixed reserve administration floor: 15,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Reserve = units x expected claim per unit x occurrence rate % + admin floor) to the inputs above produces each figure below.
  • At this operating point the engine returns 166,200 $ for total warranty reserve cost, the number this scenario is built around.
  • At this operating point the engine returns 9,233 $ / piece for warranty reserve cost per unit.
  • At this operating point the engine returns 151,200 $ for variable warranty reserve cost.
  • At this operating point the engine returns 15,000 $ for fixed warranty reserve adder.

How this compares with the baseline

  • Against the tool's baseline example, where expected claim occurrence rate sits at 30% and the headline result is 144,600 $, this scenario comes in 14.94% above the baseline at 166,200 $.
  • A figure at this level is achievable when expected claim occurrence rate is genuinely sustained, not just peaked for a shift. It models expected value, not a worst-case tail — a single catastrophic boiler failure or a serial defect can blow past the reserve, so pair it with a risk buffer for known-weak designs.

Results at a glance

  • Total warranty reserve cost: 166,200 $ (headline result)
  • Warranty reserve cost per unit: 9,233 $ / piece
  • Variable warranty reserve cost: 151,200 $
  • Fixed warranty reserve adder: 15,000 $

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.