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Using a relative version of Auslander’s formula,we give a functorial approach to show that the bounded derived category of every Artin algebra admits a categorical resolution.This,in particular,implies that the bounded derived categories of Artin algebras of finite global dimension determine bounded derived categories of all Artin algebras.Hence,this paper can be considered as a typical application of functor categories,introduced in representation theory by Auslander (1971),to categorical resolutions.