There two ways to set Referenced output in formulation.
1. Edit a formulation spec, open a internal output, in summary tab, click search icon beside spec name, in search page select another material spec, then the search page closed, the output type is Referenced-Product now.
2. Edit a formulation spec, open an output, change the output type to External, click done then save and close the formulation spec. Go to the output Material spec in read mode, click graduate icon beside output type in summary tab, the material spec's output type will be changed to Referenced-Product now.
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You can also "graduate" an external output material to a referenced product. From the External Product Material specification, look under the Material Attributes section, you should see the Output Type property with a "graduation cap" next to it (you made need specific role membership, the Oracle docs would have the specifics for this). Clicking the cap icon will change the output type from external to your choice of Referenced - Product, By-Product or waste. Saving the spec will change the output type, but be aware that changing to a referenced output type severs the theoretical roll up link with the original formulation (nutrients will no longer be rolled up from the formulation, nor will breakdowns and compliance information, etc.)