The Baseline database in AX2012/AX2012R2 is optional when installing the database(s). During installation of the databases, this is the only point it gets installed. So what if you need to setup a Baseline database after having installed AX2012? If you have a Baseline database laying around, you could restore it - and hope the schema is valid for the version of AX you are working on.
There is another easy method. :-)
Start by creating a new database, an empty database. I'm giving it around 2GB of space in my example.
Set the recovery mode to Simple. You don't need point-in-time recovery for this database.
Then run the PowerShell command Initialize-AXModelstore on the database.
Observe the database now has the elements required for a modelstore.
Make sure you add the necessary users with proper access, so they can use the new Baseline database.
Finally, head over to the AOS Server Configuration and choose the Baseline database.
That is it. :-)