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The success and effectiveness of modern lean manufacturing concepts requires robust and highly reliable machinery. In this thesis, we develop several simulation studies to compare the performance of a several manufacturing systems under different maintenance polices. The main focus of this work is to compare traditional time-based maintenance policies with degradation-based predictive maintenance policies that utilize real-time sensory information to assist in decisions regarding maintenance management and component replacement. The simulation studies developed in this thesis demonstrate the benefits of using sensor-based degradation models to predict failure.