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The Scan Manager lets you select levels of File Compression to find a good balance between good image quality and small file size when saving the pages of a file. This setting would remain in effect until you change it.
The menu looks like:

Note that the "active" compression method has the check mark.
HINT: You can use this to save different types of documents into the same file.
For example: If you are scanning B&W pages into a document you may want to use a high level compression such as GROUP4 to produce a small sized file. However this would cause a photo scanned with the same setting to be converted into a poor quality B&W scan. When you are ready to scan the photo, simply change the compression type to one such as JPEG or LZW and scan the photo.
After the photo is scanned (and stored) at the compression level that is more suitable for it, you can change the compression back to the GROUP4 and continue scanning B&W pages.
This type of flexibility allows you the best of both worlds. Great looking documents and small file sizes.
The valid options for File compression are:
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No Compression - the file is not compressed. This will be the highest quality, but also the largest file size.
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LZW Compression - The Lempel-Ziff-Welch compression algorithm was developed by Terry Welch in 1984, as a modification of the LZ78 compressor by Abraham Lempel and Jakob Ziv . It is a lossless technique which can be applied to almost any type of data, but is most commonly used for image compression. LZW compression is effective on images with colour depths from 1-bit (monochrome) to 24-bit (True Colour).
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CCITT Compression - Bilevel Huffman compression named after its inventor, David Huffman, formerly a professor at MIT. Huffman compression is a lossless compression algorithm that is ideal for compressing text or program files. This probably explains why it is used a lot in compression programs. In the imaging sector, it produces quite good results (=small files) for black and white images.
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GROUP3 Compression - Officially known as CCITT T.4, Group 3 is a compression algorithm developed by the International Telegraph and Telephone Consultative Committee in 1985 for encoding and compressing 1-bit (monochrome) image data. Its primary use has been in fax transmission, and it is optimised for scanned printed or handwritten documents. Group 3 is a lossless algorithm, of which two forms exist: one-dimensional (which is a modified version of Huffman encoding) and two-dimensional, which offers superior compression rates. Due to its origin as a data transmission protocol, Group 3 encoding incorporates error detection codes.
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GROUP4 Compression - Group 4 compression, officially CCITT T.6, is a development of the two-dimensional Group 3 standard, which is faster and offers compression rates which are typically double those of Group 3. Like Group 3, it is lossless and designed for 1-bit images. However, being designed as a storage rather than transmission format, it does not incorporate the error detection and correction functions of Group 3 compression.
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JPEG Compression - The JPEG compression algorithm has its origins in moves to develop compression techniques for the transmission of colour and greyscale images. It was developed in 1990 by the Joint Photographic Experts Group of the International Standards Organisation (ISO) and CCITT. JPEG is a lossy technique which provides best compression rates with complex 24-bit (True Colour) images. It achieves its effect by discarding image data which is imperceptible to the human eye, using a technique called Discrete Cosine Transform (DCT). It then applies Huffman encoding to achieve further compression.
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PACKBITS Compression - A special version of RLE compression used in TIFF format sometimes.
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