Potentiometers are simplest type of displacement sensors. They can be used for linear as well as angular displacement measurement, as shown in Fig.
They are the resistive type of transducers and the output voltage is proportional to the displacement and is given by:
E0= (Xi/Xt)E ,
Where Xi is the input displacement, Xt is the total displacement and E is the supply voltage.
The major problem with potentiometers is the contact problem resulting out of wear and tear between the moving and the fixed parts.
Because of friction and moving parts, we can’t expect an accurate measurement. But for simple applications potentiometers are very useful and are of low cost.