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All product reservations are automatic unless a player has chosen to set product reservation to manual mode. Any contract you close, both within the local and common markets, and outside these markets, will be followed by an automatic product reservation to ensure delivery of products that are promised in these contracts.
When you are interested in keeping some of your products in some of your corporations on stock and not offer them on the market, you can do so by changing the reservation procedure in these corporations into manual mode. In that mode, the product reservations in these corporations are your own responsibility.
A corporation may produce 1000 units of some product, have contracts for the delivery of 500 and retain 800 units because you want to sell 300 units at a later date. (The last 200 units will be offered on the world market).
You can set the reservation of that corporation to manual and retain 800 products per month. Any change in the contracts of that corporation must be followed by a manual update of the retained quantities.
If you decide to set the product reservation of that corporation to automatic mode, the quantity of products that are needed to be reserved for the existing contracts will be recomputed and all the retained products that are not needed for the current contracts will be sold on the international market.