The inherent shortcomings of the subchannel analysis were analyzed, and an alternative approach using volume porosity, surface permeability, and distributed resistance and heat source was developed. The volume porosity, surface permeability, and distributed resistance and heat source approach has advantages over the subchannel analysis because of the use of orthogonal coordinates and geometrically similar control volumes for both axial and transverse momentum equations. Furthermore, it can readily be reduced to the volume porosity and distributed resistance and heat source approach, which is the only viable method for thermal-hydraulic analysis for large rod bundles.