1) Production to sandbox(full copy)
2) Production to sandbox(partial copy)
If you choose to make a full copy of the production instance then you need to look into the storage anywhere near the limit from the Dynamics 365 Admin Center..
FULL COPY OF PRODUCTION TO SANDBOX:
The advantage of full copy production to sandbox is that of replica of the production and everything is copied into sandbox (name it as UAT).
Copied functionality is everthing starting from entities, webresources, plugin, workflows, business process flow, etc..
Here is an important point to discuss is that if you have development work to be done then it is good to have a partial copy of the production as a sandbox(development environment).
PARTIAL COPY OF PRODUCTION TO SANDBOX:
The advantage of the copying of the partial copy is that its just copy the skeletion of the production instance no records are moved into the sandbox, just like the brand new CRM but the all the customization of the production without the records and just the views, workflows, webresources etc…
So if you have a project to deliver then start from the partial copy of the sandbox and name it as development environment and create an another copy of the production to sandbox name it as UAT.
After successfull development work in the dev(sandbox) then deploy the solution into the UAT, then test the functionality and deploy into the production..
I hope this helps::
Happy CRMing.