2024 X-Energy Team

The Challenge

MSBA-BA graduate students Forest Webb, Ayden Cohn, Justin Alcorta, and Brendan Nussbaum evaluated the effectiveness of implementing a temporary storage warehouse during the construction of a new nuclear reactor for X-Energy. The goal was to address common issues in nuclear construction, such as inconsistent supply of raw materials and costly delays, by developing adaptable models for economic order quantity, safety stock, and warehouse sizing.

The Solution

The team developed three highly adaptable models to optimize raw material ordering, safety stock, and temporary warehouse sizing. These models aimed to mitigate construction delays and cost overruns.

1. Economic Order Quantity (EOQ) Model: This model calculates the optimal order size for materials based on total demand, carrying costs, and ordering costs, ensuring cost efficiency in material procurement.
2. Safety Stock Model: This model ensures that sufficient backup materials are on hand to prevent delays, using a 99.9% confidence interval to manage risk.
3. Warehouse Cost Model: This model estimates the size and operational costs of a temporary warehouse, considering factors like construction, temperature and humidity control, and labor.

The economic analysis showed that implementing a temporary warehouse could significantly reduce labor costs and potentially generate early activation revenue by avoiding delays. The team’s recommendations included continuing to refine the models with accurate data, engaging stakeholders to tailor the models to specific customer needs, and integrating other risk management strategies for further cost savings. The project aimed to provide X-Energy with a reliable framework for planning and execution, setting them apart from competitors.