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Here is an example.
Fresh Strawberries = Frozen Strawberries and Water
Not sure I follow.
Say you are making Jam, which calls for fresh strawberries. So you add Fresh Strawberries as a Material to the Formula.
If you know that there are times of the year or in certain locations that fresh strawberries are not available, then using frozen strawberries is acceptable. The only problem is that the moisture content of frozen strawberries is lower than fresh ones (just an example so might not be accurate). If the moisture content is different, then the jam that you are making will taste different. To make up for this you must also add water to the Formula.
This can be modeled as Fresh Strawberries having an Alternate as Frozen Strawberries + Water. In other words, Fresh strawberries is equivalent to frozen strawberries with some water added.
I hope this helps.