Analyze Company Warranty For Free

To calculate the warranty expense, first figure out how many products will need repair or replacement:Total number of units sold X Percentage of units that are defective.Units needing repair or replacement X cost per unit to repair or replace.14 water bottles x $4 per water bottle = $56 cost of inventory.

A common and poor technique to gather field data is to count the number of returns by week or month. This can provide a graph showing the number of returns over time. It hides information you need to understand your field failures.

This measure calculates the total value of warranty claims paid in the 12-month period as a percentage of total business entity revenue for the period. A warranty claim is a claim by a customer/product owner for a product under warranty, and usually entails either repair or replacement.

To calculate the warranty expense, first figure out how many products will need repair or replacement:Total number of units sold X Percentage of units that are defective.Units needing repair or replacement X cost per unit to repair or replace.14 water bottles x $4 per water bottle = $56 cost of inventory.

Warranty data analysis relies on the estimation of a failure distribution based on data including the age and number of returns and the age and number of surviving units in the field.

Divide the amount of your actual warranty claims in the most recent year by your total sales in the same year to calculate your warranty claims as a percentage of sales. For example, if you had $1,600 in warranty claims and $80,000 in sales, divide $1,600 by $80,000.

Warranty data analysis relies on the estimation of a failure distribution based on data including the age and number of returns and the age and number of surviving units in the field.