  We approximate the distribution of total expenditure of a retail company over
warranty claims incurred in a fixed period [0, T], say the following quarter.
We consider two kinds of warranty policies, namely, the non-renewing free
replacement warranty policy and the non-renewing pro-rata warranty policy. Our
approximation holds under modest assumptions on the distribution of the sales
process of the warranted item and the nature of arrivals of warranty claims. We
propose a method of using historical data to statistically estimate the
parameters of the approximate distribution. Our methodology is applied to the
warranty claims data from a large car manufacturer for a single car model and
model year.
