Final answer:
Net requirements in inventory management are the amount needed after subtracting the safety stock from gross requirements, serving as a buffer against various risks.
Step-by-step explanation:
The student's question involves understanding inventory management terminology within a business context. Specifically, net requirements in inventory management are calculated by subtracting the safety stock level from the gross requirements. Net requirements signify the actual amount that needs to be produced or ordered to meet the expected demand, after accounting for the safety stock. Safety stock is the additional quantity of an item held in inventory to reduce the risk that the item will be out of stock. Safety stock serves as a buffer against forecast errors, lead time variances, and unforeseen spikes in demand. Therefore, net requirements do not equal gross requirements minus safety stock; rather, they are the remaining amount needed after the safety stock has already been accounted for.