This forum includes discussion about project risk analysis and risk management theory: Monte Carlo simulations, Event Chain Methodology, schedule and cost risk analysis. Please submit questions and case studies about your experience with our project risk analysis software.
Moderator: Intaver Support
- Posts: 24
- Joined: Tue Mar 07, 2006 3:04 pm
- Location: Italy
What is meant by irreducible risk?
- Posts: 856
- Joined: Wed Nov 09, 2005 9:55 am
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.
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject