A compound attribute differentiates a characteristic to make the characteristic uniquely identifiable.
Let's say that you have a manufacturing company and you have manufacturing plants in different country(India,USA,Australia,China) and in each country you have 5 storage location for these plant(10,20,30,40,50). Then it is meaningless to Just mention Storage location(10,20,30,40,50) without plant in Report or KPI. Because storage location 10 will be available in all countries and it makes no sense by just mentioning storage location alone in report. So we need to compound Plant with storage location.
In storage location Info object compounding tab we need to include plant as the superior info object(Plant). Once Plant is compounded with storage location whenever we use Storage location info object in creating DSO, Infocube or BEX Query, automatically Plant info object will be added to the respective Objects.
The Compounding Infoobject Acts as a compounding Primary Key at the Master Data Table.