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What is meant by irreducible risk?
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Irreducible risk is sum of the aleatory risk, which is modeled using 3 point estimates for Low, Most Likely, and High for duration and cost, and residual risk that remain due to risk events or epistemic risks that cannot be completely eliminated. Often irreducible and residual risk are considered equivalent terms depending upon definitions used.
The main focus of identifying the irreducible risk is that because it is irreducible, it must be accounted for with cost contingency and schedule margin.
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