Why use multiple columns as primary keys (composite primary key)

Another example of compound primary keys are the usage of Association tables. Suppose you have a person table that contains a set of people and a group table that contains a set of groups. Now you want to create a many to many relationship on person and group. Meaning each person can belong to many groups. Here is what the table structure would look like using a compound primary key.

Create Table Person(
PersonID int Not Null,
FirstName varchar(50),
LastName varchar(50),
Constraint PK_Person PRIMARY KEY (PersonID))

Create Table Group (
GroupId int Not Null,
GroupName varchar(50),
Constraint PK_Group PRIMARY KEY (GroupId))

Create Table GroupMember (
GroupId int Not Null,
PersonId int Not Null,
CONSTRAINT FK_GroupMember_Group FOREIGN KEY (GroupId) References Group(GroupId),
CONSTRAINT FK_GroupMember_Person FOREIGN KEY (PersonId) References Person(PersonId),
CONSTRAINT PK_GroupMember PRIMARY KEY (GroupId, PersonID))

Your understanding is correct.

You would do this in many cases. One example is in a relationship like OrderHeader and OrderDetail. The PK in OrderHeader might be OrderNumber. The PK in OrderDetail might be OrderNumber AND LineNumber. If it was either of those two, it would not be unique, but the combination of the two is guaranteed unique.

The alternative is to use a generated (non-intelligent) primary key, for example in this case OrderDetailId. But then you would not always see the relationship as easily. Some folks prefer one way; some prefer the other way.