The purpose of this paper is to outline a theoretical approach to approximate reasoning. The author shares the view that the emergence of an algebraic approach is vital for the advancement of conceptual understanding as well as technical knowledge of knowledge engineering. The notion of a knowledge diagram is suggested as a unifying framework to explain some significant results in this area. This is a categorial point of view promoting the idea that the concept of transformation be taken as fundamental in place of membership. Entities are characterized by their universal properties which specify their role in relation to other entities. Once the operational description is known, internal structure is of lesser importance.
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