These two papers were presented at an ordinary meeting of the Institute held in London on 13 March 1964. Mr. R. J. Treadwell of Smiths Aviation Division first briefly surveys the development of heading references for air navigation culminating in the perfected gyro-magnetic compass (based on an analysis of the sources of error by Green and Glenny), in which the errors of the system are of less significance than the knowledge of variation. Wing Commander J. D. Ackerman of the Aircraft and Armament Experimental Establishment, Boscombe Down, then describes the methods of compass evaluation evolved at Boscombe Down and how this has been used to evaluate the particular compass system described. 4 49 £O R. J. TREADWELL VOL. l 8

A simple analysis of the factors giving the most economic subdivision of a complex system into units for the purpose of manufacture and test is derived from assumed relations between fabrication and test costs, complexity, and the probability that individual elements are faulty. Expressions are derived for relative system cost, minimum system cost, optimum unit size, and optimum unit yield. The last is shown to be independent of fault probability. The results of the analysis are interpreted and possible applications are considered.