Hello Madhulika,
Junction objects are used to create many to many relationships between objects. If you take the Recruiting application example, you can see that a Position can be linked to many Candidates, and a Candidate can apply for different Positions. To create this data model you need a third object "Job Application" that links the two.So you'd create a lookup field for both Position and Candidate object on the "Job Application" object. This will establish many to many relationship between Position and Candidate via the "Job Application" object known as the junction object.
Creating the many-to-many relationship consists of:
Creating the junction object.
Creating the two master-detail relationships.
Customizing the related lists on the page layouts of the two master objects.
Customizing reports to maximize the effectiveness of the many-to-many relationship.
Creating the Junction Object
To create the junction object:
From Setup, click Create | Objects.
Click New Custom Object.
In the custom object wizard, consider these tips specifically for junction objects:
Name the object with a label that indicates its purpose, such as BugCaseAssociation.
For the Record Name field, it is recommended that you use the auto-number data type.
Do not launch the custom tab wizard before clicking Save. Junction objects do not need a tab.