Ann,
Without explaining the long history of this functionality, one use case would be to e.g. manage cut offs. So you have a mother roll of 48 inches width and you cut a customer demand of 16 inches. The reminder will be 32 inches. Let’s assume these 32 inches are not a standard size which you keep in stock, but 30 inches would be. So you enter as a co-product in the multi item order the material number of the 30 inch width roll (which you cut at the same time as you cut the 16inch customer demand). You don't need necessarily a planned or production order for the 30 inch roll, just enter the material number /quantity.
Yes, you could also enter a material number for a MTO sales item to consume the 32 inches, or other materials which have some demand and would fit well, but this was originally not the intention of this functionality. In those cases the order combination is the right feature to use.
Regards
Stefan