What does the Probability Severity (P*S) score measure?

The Probability Severity (PS) score is a risk assessment tool that quantifies the likelihood of a risk event occurring (probability) and the potential impact it could have (severity). By multiplying these two elements, organizations can prioritize risks based on their overall score. A higher PS score indicates a greater concern that should be addressed, as it reflects both how likely a risk is to happen and how serious the consequences would be if it did occur. This metric is crucial for effective risk management, aiding in decision-making processes regarding resource allocation and mitigation strategies.

In contrast, while the financial cost of a risk (as mentioned in one of the other options) may be a consideration in assessing the overall impact, the PS score specifically focuses on probability and impact, not explicitly on monetary values. Similarly, the involvement of stakeholders or the duration of project phases does not pertain to the measurement of risk likelihood or impact, making them irrelevant to the definition of the PS score.