Procedure is quite simple.
1) Once you complete the submission of choices to the JoSAA website, the computer goes through the sequential order of ranks starting from AIR 1 of JEE Mains and JEE Advanced
2) It depends on your options as to which Rank is checked.
For example let us say you have a JEE rank of 2500 and Advanced Rank of 2000.
He exercised his options in this way:
1. IIT Bombay CSE
2. IIT Delhi CSE
3. IIT Madras CSE
4. NIT Warangal CSE
5. NIT Trichy CSE
6. IIT KGP CSE
7. IIT Kanpur CSE 
and so on..
3)Now when it comes to the first option, it is to be valuated on the rank of JEE Adv. so it is halted to check your options until all the 1999 ranks of JEE adv above you are either allotted in Mains(NIT's or GFTI's) or IIT(in his options).
When it comes to your rank, it verifies whether the seat is available, if it is, then you are allotted the