Welcome to an SAP Procurement microblog:
An option line item in SAP procurement for public sector is comparable to a future on the financial markets. In both occasions buyers try to minimize their risk or take advantage of their market position in locking in a price today that might not be available in the future. Let’s fast forward to that future: Now if market prices turn out to be above the ones they locked in in the past, buyers execute their options. If, on the flip side, market prices had decreased, buyers are better off to forgo their right to execute options and to buy on the market instead.