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Before I address the core question of utility of testing of models, it is worthwhile pointing out that CAD (computer aided design) is a computerised system used to simplify the process of designing, particularly the the process of preparing engineering design as well as to represent the finalized design. The engineering drawings prepared with or without use of CAD can be considered a model or conceptual representation of a real product. But when we speak of models used for testing of products, we generally refer to three dimensional representation of products. Again CAD may provide input data for CAM (computer aided manufacturing) of such models, but it is not an essential part of model making.
The physical models used for testing of product can be exact full scale, working replica of product as designed , or it may only represent some aspects of the product, and may be much smaller or bigger than the product. The exact nature of the model depends on the nature of the testing to be done. For example for studying the air resistance of an airplane using a small wind tunnel, the model will be a miniaturised version of the shape of the plane, probably with different dimensions scaled down to different ratio based on the behavior of air resistance.
Use of models for testing products, before finalising their design for final manufacture and use, helps to reduce development cost time in several ways. Making smaller models helps to visualize the product in totality without incurring the expenses of a full scale model. Small pilot plants before constructing full scale processing plant similarly help to identify the problems in the original design and rectify them while building full scale model.
Models also help to test different aspects of the design without having to design or build the complete product. For example, the aesthetic aspect of a car body and shape can be finalized base on model of the body without any internal parts. Full scale models having all the feature of the product designs are used to test in detail the suitability of product before expensive facilities are set up for their mass manufacture. Similarly testing of products before using them on critical applications helps avoid costly mistakes. For example, a vehicle designed for remote operation on moon will be first tested thoroughly in laboratory to ensure that it will perform satisfactorily when deployed for scientific exploration on the moon.
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