Consider an analog signal whose values from 0 to +10.let us assume that we whish to convert this signal to digital form and that the required output is a 4-bit digital signal .we know that a 4-bit binary number can represent 16 different values, 0 to15: it follows that the resolution of our conversion will be 10V/15=2/3V.thus an analog signal of 0V will be represented by 0000.2/3V will be represented by 0001, 6V will be represented by 1001, and 10V will be represented by 1111.

All these sample numbers are multiples of the basic increment (2/3V).A question now arises regarding the conversion of numbers that fall between these successive incremental levels. For instance, consider the case of a 6.2-V analog level. This process is called quantization. Obviously errors are inherent in this process; such errors are called quantization errors. Using more bits to represent(encode or, simply, errors code) an analog signal reduces quantization errors but requires more complex circuitry.