As per wikipedia’s description:
Computer-aided design (CAD), also known as computer-aided design and drafting (CADD),[1] is the use of computer technology for the process of design and design-documentation. Computer Aided Drafting describes the process of drafting with a computer. CADD software provides the user with input-tools for the purpose of streamlining design processes; drafting, documentation, and manufacturing processes. CADD output is often in the form of electronic files for print or machining operations. CADD software uses either vector based graphics to depict the objects of traditional drafting, or may also produce raster graphicsshowing the overall appearance of designed objects.
CAD often involves more than just shapes. As in the manual drafting of technical and engineering drawings, the output of CAD must convey information, such as materials, processes, dimensions, and tolerances, according to application-specific conventions.
CAD may be used to design curves and figures in two-dimensional (2D) space; or curves, surfaces, and solids in three-dimensional (3D) space.[2]
CAD is an important industrial art extensively used in many applications, including automotive, shipbuilding, and aerospace industries, industrial and architectural design, prosthetics, and many more. CAD is also widely used to produce computer animation for special effects in movies, advertising and technical manuals. The modern ubiquity and power of computers means that even perfume bottles and shampoo dispensers are designed using techniques unheard of by engineers of the 1960s. Because of its enormous economic importance, CAD has been a major driving force for research in computational geometry, computer graphics(both hardware and software), and discrete differential geometry.[3]
The design of geometric models for object shapes, in particular, is occasionally called computer-aided geometric design (CAGD).[4]
In CAD, many commands are available for drawing basic geometric shapes. Examples include CIRCLE, POLYGON, ARC, ELLIPSE, and more.
For more info please visit wikipedia: http://en.wikipedia.org/wiki/Computer-aided_design
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