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The Computer Aided Analysis and Simulation (CAAS) package is the result of a multiphased program aimed at developing a user oriented, computer aided design technique for the analysis, design and specification of hydraulic power transmission systems. The package is intended to eliminate the need for detailed computer programming on the part of the system designer and allows effective use of the technique by anyone familiar with the CAAS package. This study has included the development of the general system analysis and optimization techniques, the development of the Probelm Oriented Language (POL), modeling of the most commonly used hydraulic components and testing of a selected group of hydraulic system components to verify the models developed. This paper presents the rationale of the CAAS package. The theoretical basis, program structure and application examples are included.