Thanks for getting back and Happy Holidays.
I've reinstalled the FSX and also downloaded the updated version of PMDG, but the problem occurs again. I have both services packs installed in FSX also. The FSUIPC is v4.9xxx.
I'm really confused as to what may cause this problem. I can also take a video of the problem and post it on youtube for you to see it. And, yes, I'm using FSX.
I was also able to do some additional tests. I programed PMDG through the CDU options where I assigned specific keys to increase or decrease heading, course, IAS etc. expecting the problem will not exist if i control them through key. Unfortunately, I get the same result as with the encoder and more specifically. If i start from 000, then I get 001, 002, 003, 004, 005, 007, 010, 014, 019, 024, 029, 034.....I i change the direction, I get very similar reading. It starts with increment of 1, then gradually the increments increases to 5, once at five, the increments stay at 5 digits. So the increment by 5 digits does not take place immediately, only after 3 of 4 movements. It is very strange.
I have also updated the FSUIPC to the newest version 4.974 and I still get the same result

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I hope there is a solution.
Looking forward hearing from you.