Data Modelling :Creating object relationship

Note: All credit goes to Salesforce, I am just a developer who enjoy playing trailhead and try to make note to myself.

Types of Object Relationship

1. Lookup
• relationship that links one object to another object.
• can be used to create 1:1 or 1:M relationship
2. Master Detail
• parent:child relationship.
• master record controls certain behavior of the details or subdetail record.
• ownership and sharing is determined by master record.
• when master record is deleted,the detail also will be deleted along with it.
• master detail relationship always required on detail record.
• use for tight binding between two objects
• master object can also contain rollup summary field.

Differences between Lookup and Master detail relationships

1. Master detail relationship
• cannot create detail without master
• detail is also deleted when master is deleted
• the sharing rules is inherited from the master record
• number of master detail relationships are limited based on platform edition and licence
• can't set profile object permission for a detail record.The details record inherits permissions from the master record
• master-detail relationship are automatically included in  report record types
2. Lookup relationship
• to reference commonly shared data, such as reference data
• to relate multiple parent records to the child record
• to link two objects together when you don't want the behavior of the master-detail relationships such as sharing rules,profile permission and cascade delete.
• if the details object has its own tab, then look up is the choice. 

Source:Creating object relationship