Final answer:
Net requirements equal gross requirements minus safety stock when managing inventory in a business context.
Step-by-step explanation:
Net requirements equal gross requirements minus safety stock when managing inventory in a business context. This formula is used to calculate the actual amount of a product that needs to be produced or purchased after accounting for the safety stock, which is the extra inventory kept on hand to address uncertainties in demand or supply. The net requirements provide a more accurate estimate of the quantity needed to fulfill customer demand.
For example, if the gross requirements for a product are 100 units and the safety stock is 20 units, the net requirements will be 80 units. This is because the safety stock is subtracted from the gross requirements to determine the actual amount required.
Therefore, the statement 'Net requirements equal gross requirements minus safety stock' is true.