Hello Acchan
The main purpose of both is same i.e. facilitate the reuse of simulink models. When you work with libraries, simulink "imports" the content of the referenced models in to the main model. Sometimes, this leads to the developer dealing with gigantic models (more than 50k blocks), which can be time consuming. On the other side, model reference deals with separated models. They are put together when you press the simulate button, but during the design time, you deal with completely separated models. With model reference, you can also select acceleration methods (it basically compiles the model) and this can't be done with libraries.
Hope this will help.
