But there's a balance between maximizing sales with more safety stock and minimizing waste with less, because of uneven demand fluctuations.

Ah, but if the 2-pint jugs of standard semi-skimmed milk are out of stock, maybe you buy the 1-pint or the 4-pint or the organic.

The customer response depends on both the product category and the time of day, for obvious reasons. And I guarantee the likes of Wal-Mart will have run studies on this and chosen the optimal ordering level for milk in their stores.