Unlike open-loop systems, which are controlled only by an input signal—meaning, they do not adjust based on feedback—closed-loop systems use feedback to regulate a particular process. A closed-loop system consists of a measurement device, an error detector, a controller, and an actuator. A measurement device monitors a variable, such as temperature, pressure, or weight, and provides data to which the controller can respond. The error detector receives data from the measurement device and compares the data to a set point, or target value. If the controller receives an error signal from the error detector, the controller sends out its own signal instructing the actuator to apply any necessary corrective action so that the variable matches the value specified by the set point.

An oven is a simple example of a closed-loop system. The objective of the system is to maintain the temperature inside the oven at a specific, preset level. When you set your oven to a certain temperature, the oven will heat up until it reaches that temperature. The oven's thermostat serves as both the measurement device and the controller. If the thermostat detects that the temperature in the oven is too low, it will instruct a gas burner to fire, or an electric element to heat up, which causes the temperature in the oven to rise. When the correct temperature is reached, the thermostat then instructs the actuator to turn off and stop heating the oven.

Many automated manufacturing systems utilize closed-loop systems to ensure that desired outcomes are achieved. Imagine a facility that bakes bread. Computers control the entire process by using sensors to monitor various aspects, such as the quantity of ingredients, oven temperature, cooling time, and packaging. For example, sensors are used to weigh the ingredients, the dough, and the finished product; they also monitor the temperature of the ovens or cooling units; other types of sensors can even visually inspect the product for color and texture. The data gathered by these measurement devices are passed to the computer, and the controller then regulates the system so that each loaf of bread comes out perfectly.

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