From the manual - Chapter 4 of process manufacturing:
Planning Item - Some processes produce only co-products without producing any primary formula items. As a result, the production cost needs to be allocated only between the co-products generated. Microsoft Dynamics AX 2012 addresses this through a planning item, a place-holder to retain the formula lines, co-products and by-products in the respective forms.
Planning Formula - You can use the planning formula to produce the co-product. You select the formula item and then the formula is used in batch order processing. This applies to all items of the production type Co-products. You can specify the planning formula for the relevant co-product at the released product level, and this will generate a planned order for the planning item to produce co-products. You can also identify the planning formula in the Planned order form for the co-product demand. You can select the planning formula even after performing the Master scheduling. This flexibility accommodates up-to-date changes in the production scheduling.