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This applies if your options are also available on your site as an individual item as well and that you want to keep inventory control for each option.
For example lets say you sell T-Shirts: You can have a product listing with, Red, white, Blue as options. Also, you can have 3 separate listings for each color. From the first listing with options, you can click on "select" and assign the individually listed items to it. When the customer selects this options and adds to cart, it will be added to the cart while the inventory will be adjusted accordingly.
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