This type of position detector is widely used by instrument manufacturers as a means of providing a voltage change which is proportional to a position input. The following schematic shows a simple circuit diagram of the Inductive Position Detectors. A permeable ferrite disc is positioned by the process variable (pressure) with respect to a "sensing" coil.
If the process pressure increases, the ferrite disc is moved closer to the sensing coil, raising the magnetic flux density in the coil (the same effect as placing an iron core in a solenoid), and therefore increases its inductance. Get more information about the Inductive Position Detectors Simple Circuit Diagram here (source: canteach.candu.org)