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The rapid evolution of sensor technology, using techniques such as lasers, machine vision and pattern recognition, provides the potential to greatly improve the Statistical Process Control (SPC) method for monitoring manufacturing processes. This paper studies the method of using on-line sensors to monitor manufacturing processes and compares that method with the control chart method, a widely used SPC tool. Two separate economic models are formulated for using either a sensor or a control chart to monitor a manufacturing process. Then, the two models are compared in a sensitivity analysis with respect to several process parameters.