Wearable Medical Sensors worked example

Warranty Return Reserve at 2.88% expected warranty return rate: a worked example

Suppose expected warranty return rate falls to 2.88%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimate the warranty return reserve a wearable sensor program should accrue against expected field returns.

The inputs for this scenario

  • Sensors Shipped Under Warranty: 50,000 units (held at the documented default)
  • Cost to Service a Return: 38 $ / unit (held at the documented default)
  • Expected Warranty Return Rate: 2.88 % (the input this scenario stresses; the baseline uses 4)
  • Reserve Administration Charge: 3,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Warranty reserve = units shipped x cost per return x (return rate %) + admin charge.
  • Total warranty return reserve cost works out to 57,720 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty return reserve cost per unit works out to 1.15 $ / piece at these inputs.
  • Variable warranty return reserve cost works out to 54,720 $ at these inputs.
  • Fixed warranty return reserve adder works out to 3,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where expected warranty return rate sits at 4% and the headline result is 79,000 $, this scenario comes in 26.94% below the baseline at 57,720 $.
  • It computes the total warranty reserve and the reserve carried per shipped unit by applying the expected return rate and per-return cost to the shipped population, plus fixed admin. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total warranty return reserve cost: 57,720 $ (headline result)
  • Warranty return reserve cost per unit: 1.15 $ / piece
  • Variable warranty return reserve cost: 54,720 $
  • Fixed warranty return reserve adder: 3,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Return Reserve calculator, set expected warranty return rate to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.